HONG KONG TODAY

Evening Post, Volume CXX, Issue 6, 6 July 1935, Page 28

HONG KONG TODAY

ITS APPREHENSIONS

ECONOMIC NATIONALISM

JAPANESE COMPETITION

The affairs of South China, in comparison with those of the North, have been somewhat neglected by writers on the Far East (says a correspondent in the "Manchester Guardian"). The justification for directing attention to the South lies partly in the fact that many, if not most, of the moral and political influences which gave birth to, and are developing, modern China originated in, and still draw much of their force from Kwangtung; partly in the fact that the southern treaty ports are responsible for about a quarter of China's foreign trade, and partly in the fact that Japan's bid for domination in the Far East makes clear appreciation of the significance of the British Colony of Hong Kong important. THE COLONY. Hong Kong is not only the distributing centre of British trade in South China but a focal point of British influence in the Pacific. It is a hilly island, eleven miles long and from two to five miles in breadth, encircled by smaller islands, and approached from the sea by deep-water channels of great variety and charm; the channels and bays which separate it from the mainland form one of the finest and most picturesque harbours in the world. High above the harbour on the north rise the bare hills of the mainland, one gaunt range lying like a barrier across the base of a fiat, tongueshaped peninsula known as Kowloon. This area and a narrow strip of the northern side of the island constitute one of the world's most important ports, from which commercial routes radiate by sea and land in all directions. Behind Kowloon lies territory leased from China for ninety-nine years in 1898. . Including certain, islands it is approximately 345 square miles in extent. The population of the port is in the neighbourhood of 1,000,000, of which non-Chinese persons total approximately 20,000. The Government of the colony comprises a Governor, an Executive Council of six official and three unofficial members, and a Legis-. lative Council of nine official and eight unofficial members, three of whom are Chinese. RECENT PROGRESS. To revisit Hong Kong after an absence of nearly ten years is to become aware of two quite different, and to some extent contradictory, sets of changes. One group- comprises structural developments of impressive magnitude, a great variety of new buildings, comprising banks and other business premises of the most up-to-date kind, many new residential sites and houses, new and spacious hitels, flats of the latest model, picture houses, factories, improved wharves and other shipping facilities, new roads, and a large increase in motor transport. Accompanying these changes one notes a striking modernisation of Chinese districts, and a still more striking modernisation of the Chinese men and women to be seen in them. Streets, shop windows, hotel lounges, refreshment-rooms —all bespeak new social . standards and a liveliness, variety, and gaiety which are in striking contrast with the staidness and uniformity of ten years ago. Accordingly, at the end of one's sightseeing, one goes to bed much impressed by the progress which the colony has made by its purpose-fulness, vitality, and success. On the other hand, the moment one begins to look closely into local conditions one becomes aware that Hong Kong is less sure of itself than it used to be. At the moment, indeed, notwithstanding appearances, it is in the dumps, a mood resulting largely from, the fact that the colony, after a surprisingly long period of resistance, is now feeling the effects of the world depression. As long as China kept out of it Hong Kong was able to do the same. Now that China is in *it Hong Kong is too. Nor has she ariy chance of emerging till China emerges, a deliverance governed, amongst , other factors, by the future of silver, the price of which is being raised artificially above that of the goods which China sells. Given a restoration of China's capacity to sell, w>.ich is handicapped by other factors besides silver, Hong Kong's fit of the dumps will brighten into relative cheerfulness. JAPANESE COMPETITION. She is, however, less certain of herself than she used to be for reasons unconnected with these causes of depression. In describing one reason, Japanese competition, it is desirable to distinguish between the entities which are affected by it—that is to say, between' Hong Kong and the distributing centre and free'port and Hong Kong as represented by its British community. It might be argued that to Hong Kong considered as a distributing centre and free port the provenance of imports is unimportant. It is clear, on the other hand, that to Hong Kong as represented by its British traders, who are the main channel for the sale of the United Kingdom's manufactures in South China, and upon whose prosperity the welfare of the port largely depends, Japanese competition is vital. ; Statistics show that in 1931 Japan's proportion of the import trade was smaller than Great Britain's; in 1934 it was greater, notwithstanding the antiJapanese boycott. . In the event of a rapprochement between China and Japan, involving special economic arrangements—as- is anticipated—this fact would become still more disturbing. Hong Kong's position as a strategic is being revalued. Another reason for Hong Kong's diminished self-assurance is to be found.in China's tariff policy and, industrialisation. Ten years ago these were inconsiderable factors in her economic outlook; today 'they bulk large. They are producing two effects; of which one is general and felt all along the China coast —namely, a progressive restriction of the import of consumable as opposed to capital goods. In this respect Hong Kong is no worse off than Shanghai, except that Shanghai's import trade is much larger and can therefore afford the restriction better than Hong Kong's. Moreover, what Shanghai loses in imports it gains in exports, for goods manufactured in and around Shanghai are being increasingly shipped to Canton and other South China ports. Goods manufactured in Hong Kong, on the other hand, have to pay the same import duties as United Kingdom manufactures. Confronted by Japan's policy on the one hand and by China's economic nationalism on the other, Hong Kong's outlook is less ample, and assured than it used to be. By reason of its geographical position, however, its splendid harbour, its upright and orderly administration, and its financial and shipping facilities, it remains not merely one of the most substantial of British assets, but an essential makeweight in the maintenance, of a just and fair balance of commercial and other opportunities in the Far East. All the more important is it that the 1 colony., should, be Jinked, L aerially with