A 55,000-spindle cotton mill made a pioneer beginning in 1898, but the unrelieved humidity of the climate damaged its machinery and impaired its efficiency. Stiff competition did the rest and it was out of business before World War II. Flour mills and shell-button factories prospered for a time, then wilted in the heat of competition.
As cattle country, Hong Kong is slightly superior to the Sahara Desert. Nevertheless, Sir Patrick Manson, a doctor who specialized in tropical medicine, decided to establish a dairy company in 1886. He leased 330 acres of semi-vertical pasture from the crown and his first herd of 80 cows clambered and skidded around its dizzying slopes for a decade until an epizootic of rinderpest exterminated them. A new herd which soon outgrew its pasturage was stall-fed thereafter, living on fodder grass hand-gathered by patient Chinese women. Today’s herd includes about half the colony’s 3,000 dairy cows and is the chief domestic source of milk and butter. The dairy company has proliferated into a nutritional combine called The Dairy Farm, Ice & Cold Storage Co., which runs a chain of food stores, restaurants, soda fountains and ice and cold storage plants.
The match-making industry, dating from 1938, offers a gloomy illustration of Gresham’s Law. Factories were built on Peng Chau, To Kwa Wan in eastern Kowloon and at Yuen Long in the New Territories, turning out tiny, cheap wooden matches. Factory equipment was primitive, wages low and the matches, more often than not, splintery and unpredictable. At its peak in 1947, the industry employed almost 1,000 workers, chiefly women. Then Macao entered the market with still lower wages and skimpier matches. Every box of Macao matches ought to bear the warning: “Take Cover Before Striking Match,” but they far outsell the colony product. They have also done a lot to stimulate the manufacture of low-cost cigarette lighters.
Because of the colony’s habitual preoccupation with trade, many of its industries existed for decades without attracting much attention outside their own circle of customers. With the collapse of trade in 1951, they assumed such unexpected importance that they seemed to have been invented for the occasion. Some of them, like the printing and beverage industries, were a century old. Cosmetics, furniture manufacturing and the fabrication of nails and screws dated from the early 1900s. Three industries of considerable importance in the export market—electric batteries and flashlights, rubber footwear, and canned goods—had been around since the 1920s. Enamelware, electro-plating, machinery, tobacco, and motion picture industries appeared during the depression decade, and the leather industry emerged in 1947.
Cottage industries, or small enterprises operating out of the home or a back-room workshop, are as old as Chinese civilization, embracing everything from wood and ivory carvings to musical instruments, jade, coffins, toys, beadwork, lanterns and silk-covered New Year’s dragons. They average perhaps a dozen employees each, and number in the thousands.
The colony government has kept a careful record of total employment in registered factories (with 20 or more employees and subject to government inspection) and recorded workshops (15-19 workers and subject to inspection), but it has never had a statistical record of the number of industrial workers outside these two categories.
There are government estimates, but no precise figures, for the number of persons working in cottage industries, or such major industrial groups as building construction, engineering construction, agriculture, fishing and public transport. Estimates of the number of people working in shops, offices, and other commercial establishments are even hazier.
A purely statistical assessment of changes in Hong Kong industry that followed the 1951 trade collapse must necessarily be limited to the registered and recorded industries. Luckily, it has been the registered and recorded factories which most clearly reflected the colony’s recent economic revolution.
Between 1947, when the postwar boom began moving, and 1951, when the U.N. embargo was imposed, the number of registered and recorded industries rose from 1,050 to 1,961 and their employed force nearly doubled. The colony’s trade had been shooting upward at almost the same rate, and the Net Domestic Product (the total value of all its goods and services) had increased by 75 percent.
The embargo halted the trade boom and reduced its volume by almost one-third in 1952. Not until 1960 did the total climb back to the record level of 1951. Colony traders, abruptly cut off from the China mainland market, had to find new markets or liquidate their accumulated stocks. Some found new markets in Southeast Asia; others liquidated their stock for whatever it would bring. Colony imports rose uncomfortably above exports, investment capital began searching around for better opportunities outside Hong Kong and unemployment became an additional cause for anxiety.