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CHAPTER FIVE RECONSTRUCTION AN D INDUSTRIALIZATION, 1946-5 0 THE entrepo t functio n o f Hong Kon g wa s resumed a s soon a s the por t was reopene d t o commercia l tradin g i n Novembe r 1945 , although th e conditions under which trading was conducted could hardly be described as normal. Commoditie s an d shipping, the two essentials on which por t activities depended , wer e both lackin g in the worl d market . Foodstuff s and textiles , th e leadin g item s i n th e entrepo t trad e o f Hon g Kon g before the War, were placed under international allocation. Governmen t control o f essential supplies was maintained unti l 1948 , although i t wa s administered a s liberall y a s internationa l obligation s o f commodit y allocation woul d allow . Th e numbe r o f controlle d item s diminishe d gradually wit h th e retur n t o normalit y o f worl d production . The important part played by economic liberalism in the development of Hon g Kon g canno t b e overstressed . Thi s ha s bee n recognize d b y various student s o f it s evolution. 1 I t i s worth inquiring , however , ho w far th e faithfu l pursuanc e o f a laissez-faire polic y has been the result of far-sighted plannin g an d ho w fa r th e resul t o f immediat e economi c necessity. I n the period immediatel y afte r th e War, the combined effec t of rehabilitation i n Southeas t Asi a and o f the shortage of raw materials, machines an d foodstuff s wa s t o urg e th e resumptio n o f trade . Thi s amounted to the re-distribution and allocation of stocks concentrated i n certain area s b y th e Japanese , befor e manufacturin g an d primar y production coul d be reorganized. The established services and commer cial links of Hong Kon g wer e in immediate deman d fro m importer s i n China and other Southeas t Asian countries. In respons e to this deman d there wa s a mushroo m growt h o f businesse s i n th e Colon y i n 1946. 2 The retur n to an entrepot econom y meant the return t o dependence o n economic an d politica l condition s outsid e Hon g Kong' s control . Adaptability an d resilienc e wer e particularl y neede d i n coping with th e unstable situation of commercial regulations in China. N o rigi d contro l or adherenc e t o long-ter m plan s wa s practicable . Trade wit h Chin a wa s prosperou s i n th e first thre e quarter s o f th e year 1946 , fo r th e Chines e Governmen t pu t tremendou s effort s int o stimulating exports, in an attempt to lighten the excess of imports. Hig h Reconstruction and Industrialization, 1946-50 7 7 profits wer e reape d b y Hon g Kon g merchants . Condition s changed , however, during the later months of the year. The persistently unfavour able trad e balanc e fo r China , amountin g t o US$41 2 million s i n 1946 , made i t impossibl e fo r he r t o wai t fo r th e substantia l reviva l o f he r exports. Th e officia l Chines e polic y o f preventin g th e employmen t o f foreign shippin g i n inlan d waterway s militate d agains t economi c recovery, sinc e China' s shippin g was quite inadequate t o cope with th e demand fo r carg o space . Th e cos t o f handlin g good s a t Chines e port s was prohibitive because of the absence of mechanical facilities. 'All cargo that ca n possibly b e handled b y coolies , or teams of coolies , are carrie d ashore; wher e thi s i s impossible, th e carg o i s lowered int o a lighter o r ยป sampan alongside and taken to some point where it can be man-handle d ashore...

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