ch1.2 hk econ development pt B

What was the main focus of economic development in HK before 1940? What was the impact of it?

The development of entrepôt trade

Only small factories were developed

Which industries supplied the local market? What began in the late 1940s in HK?

Soap and matches

Rapid industrialisation

What industry developed rapidly during the 1950s-70s?

Labour-intensive light industries like textiles, clothing, plastics, toys

Later electronics, clocks and watches industries

What was the impact of rapid industrialisation?

The number of factories and employees grew

Many settled in Kowloon

Many were small and medium enterprises

What did the government do in the 1960s?

Built industrial buildings

Developed industrial areas which facilitated the development in Kwun Tong and San Po Kong

What was export-oriented in HK? What does it mean?

Manufacturing industries

Products were sold to many parts of the world like the US, Japan and West Germany

What happened in HK in 1959?

The industrial products accounted for 70% of the gross value of HK’s exports

• greatly exceeding the percentage of entrepôt trade

• Marked the transformation of HK from an entrepôt to an industrial city

What does the Positive Non-intervention Policy mean? What did it attract?

The government would not intervene in the market openly

Implemented a policy of low tax rates and free flow of foreign exchange

Attracted capital to flow into HK

How did HK try to build closer trading relationship with overseas countries?

Had been spending a lot on infrastructure for pier building (highways and reclamation projects)

What semi-official bodies were established to promote industrial development?

The Hong Kong Trade Development Council: responsible for promoting local products to the overseas markets

The Hong Kong Productivity Council: to help HK industrialists to improve quality and design of manufactured products

How was technical education improved?

In 1956, a site in Hung Hom was provided for the Hong Kong Technical College (PolyU now) to relocate

In 1969, the Morrison Hill Technical Institute was established

How did the development of entrepôt trade before 1950 help build a good economic foundation in HK?

Extensive foreign trade network with Europe, America and Southeast Asia together with the supporting industries like banking, insurance, warehousing and shipping facilitate the growth of industrial development

What was China in from 1945-1949?

The civil war period between the Guomindang and the Communist Party of China

What were the capitalists afraid of? What was the effect?

Afraid of the Chinese Communist Party consisting their properties

• many textile industrialists from Shanghai moved to HK

• brought along with capital and industrial experiences

What did the civil war lead to? Why?

The influx of immigrants from Mainland China to HK

• they wanted to settle down at a safe place and look for jobs

What did the influx of immigrants provide?

An adequate supply of cheap labour for industrial development

• crucial for the development of labour-intensive industry in HK

What was HK given by mainland government? What was the effect?

Preferential policies like supplying cheaper raw materials, food and drinking water

• reduced labour cost

• enhanced the competitiveness of HK products

Which side was China on in the Korean War?

The communist North Korea

Why did the UN impose a trade embargo on China?

They claimed that China was offering help to North Korea and threatened world peace

What was the impact of the trade embargo imposed on China?

The status of the entrepôt trade of HK was severely affected

• became the only option of HK to develop its own industries to save the economy

• HK faced a lack of natural resources and rapid population growth

What were many countries in Southeast Asia undergoing after 1945?

The process of decolonisation

What was the impact of the development of Cold War?

Other Asian regions like South Korea and South Vietnam were at war with North Korea and North Vietnam respectively

• affected their progress of industrial development

HK industries were benefitted from the international situation and faced little competition in Asia

Where was industrialisation not yet taken place in?

Taiwan, South Korea and Singapore until the late 1950s and the 1960s

What was the effect of HK under British rule after WWII?

HK enjoyed a lot of privileges like tariff concessions to trade with the British Commonwealth nations

• raised the competitiveness of HK products

What did the international community sign?

The General Agreement on Tariffs and Trade (GATT)

What did the General Agreement on Tariffs and Trade (GATT) aim at?

Stimulating global economic recovery with the reduction in tariffs after WWII

• helped HK products to be more competitive in the world market

How did the economy of the Western counties gradually transform? What did HK do regarding this?

Focused on technology-intensive industries after WWII

• imported daily necessities from other places

HK’s products entered the global market

What did HK actively develop in response to its declining entrepôt trade?

Light industries

• became successful to transform and modernise its economy

What did HK become between the late 1940s and the 1970s?

An export-oriented economy

• focused on exports of manufactured goods like toys, electronics, wigs, textile, garment, watches, radio sets and plastics

What was the effect of the massive inflow of immigrants from Mainland China?

Many of them became industrial workers in HK

Why were many light industries developed in HK?

Labour-intensive

Lacked natural resources

Had no advantage to develop heavy industries like steel, iron and vehicles