Hong Kong's Quiet Prosperity: A Haven in Turbulent Asia
Hong Kong, the Crown Colony at the entrance to South China's best harbor, is an oasis of stability in an Asia marked by alarms and a British Empire in breakdown. Despite being part of a region plagued by turmoil, Hong Kong remains quiet and stable, with profits running as high as 15-30% on investment.
The colony is driven by trade, with export-import houses, banks, ships, docks, and godowns (warehouses) making up the majority of its economy. About half of what they import goes to China, with the rest scattered throughout East Asia. Hong Kong operates on a simple principle: 'what passes in must pass out', collecting a two-way percentage on trade through direct commissions or charges for storage, insurance, and exchange.
The colony's location is not a guarantee of business success; it has lost trade to Shanghai in the past and could again. However, Hong Kong has managed to anchor its dollar at the prewar rate of four to one US dollar, maintaining an open-market discount within 25% bounds since reoccupation.
The result is marked prosperity: total 1946 trade was $1,699 million (HK), compared with $1,128 million in 1939. Price rises accounted for the increase, but by the first quarter of 1947, bulk cargoes reached prewar levels and dollar value nearly doubled.
The three main institutions in Hong Kong are the Hong Kong and Shanghai Banking Corp., the government, and Jardine's. The Bank issues 85% of Hong Kong's currency and has a prestige matching that of the Old Lady of Threadneedle Street in Britain.