# Hong Kong Annual Report, 1954/Chapter 1

As this chapter is being written the Year of the Horse is slowly giving way to the Year of the Sheep. The gallant steed is dying hardly and there will be a day or two more of confusion before the ear-shattering obsequies are complete and the Sheep brings peace and a new lunar year. In the East the horse is a symbol of authority, moving proudly against a background of panoply and war. He has an arrogant beauty and it is when his nostrils are distended, his mane flowing and his hooves battering the earth that he is a fit subject for portraiture. The domestic virtues of the Western horse are not appreciated. Constable, the brewers and the governess in her car would all have been thought guilty of debasing a fiery and independent animal to the level of some ruminant buffalo or ox with powers of traction but few other virtues.
Nevertheless it was in his Western guise that the Horse descended upon this small area of his influence a year ago. There have been no manifestations of arrogance, no glorious advances and no spectacular retreats. The pace has been forward and steady and slow. The year of the Cart-horse, in fact, —or, in one grim sense, of the camel.
The burden of the resettlement problem, which was described in last year's review, is not the sort of thing that could be lifted by a single dramatic effort or an emotional vote. A careful study of the problem was made by a new and independent department, not, indeed, in an atmosphere of academic calm, but in a work-a-day world where squatter fires of the same type, but mercifully not of the same scope, as the fire of Christmas Night 1953, multiplied until, by the end of the calender year, ten separate fires had occured and over 40,000 persons had been rendered homeless. Hong Kong, small as it is, is not the only place that has had to face the problem of nearly a million refugees since the end of the war. But it is probably the only country (and in this respect Hong Kong is a country) which has had the basic problem multiplied by natural disasters which overnight have made many tens of thousands of desperately poor people completely and finally destitute. It was said last year that relief in such circumstances as these is no remedy. Shelter for tonight and tomorrow is of little consequence when one is faced with a problem of these dimensions. It would be tolerable to be homeless for weeks ahead if there were some reasonable hope of final security in the future.
It was accepted, as one of the driest years on record advanced, that fires in the squatter colonies could not be prevented. The flimsy inflammable structures were like the cells of a honeycomb, except that they were open to the winds and suspended on parched cliffs too steep for normal development. A match and a light breeze were sufficient to doom these inaccessible communities. The danger could not be prevented but it could be limited in scope. This was the first step. Fire breaks were driven through the larger settlements and those few who were displaced were rehoused temporarily elsewhere. Before the fire breaks were made, over 50,000 people lost their homes in one fire and over 30,000 in another. Once the fire lanes were in existence the largest number of persons affected by any single fire was under 6,000 in spite of the fact that there were six separate fires in this period By September, nine months after the Christmas Night fire, it could be said with confidence that a catastrophe on that scale could not recur. This was a valuable advance, if negative.
In the meantime the land problems of resettlement were being examined. An average squatter family, living in an insanitary, overcrowded and precarious hut, occupied perhaps eighty square feet of land. The only virtue of the squatter's hit, apart from its roof, was that it was within, or near, the urban area where employment and the necessities of life were to be found; but to reprovide the estimated 260,000 squatters, even on a basis of their existing illegal holdings, would have required at least 150 acres. It was estimated that within and around the urban perimeter there was at best 20 acres of land available or on call at short notice, and perhaps a further 50 acres which could be freed if squatter shacks could first be removed. In the first place it seemed doubtful whether the whole area of available non-rural land could justifiably be reserved for a single section of the community, many of whom were recent immigrants and none of whom had any legal rights to land. There were many other citizens whose claims on developed land were undeniable. In the second place it was clearly impossible to effect resettlement even on a basis of reproviding the tiny holdings into which the squatters had compressed themselves.
It became clear, therefore, when the surveys were completed, that the possibility of resettlement lay in one direction and one direction only: intensive vertical development in place of intensive horizontal development.
The principle was accepted bit its application was tentative. In the Spring we were building to two stories, in the Summer to six and in the Autumn to seven. In the Winter we were preparing to demolish some of the two-story blocks to made way for foundations capable of holding seven stories. There are still victims of recent fires living in pathetic cabins built against the walls of side streets and cul-de-sacs. There are still people living in deplorable squalor in between the fire breaks in the old settlements. But no one has been taken outside the physical range of employment, and nearly 70,000 people have been rehoused during the year in fire proof and sanitary dwellings far beyond what they could have envisaged when, a year or two ago, they racked the rubbish heaps for sheets of cardboard and tin with which to shape four walls and a roof. The density, ventilation and amenities of these new blocks are not satisfactory. But the design is such that later alterations can provide for all these things. And it was thought better to provide all with minimum standards of hygiene, safety and security before thinking in terms of the optimum for anyone. A plan to which approval in principle has been given provides for the construction of about 30,000 domestic units for the benefit of 150,000 squatters who will be moved in order to free land for other grades of domestic development, or who are homeless as a result of this year's fires.
If development is reckoned in terms of the elimination of squalor and misery and insecurity, and the provision of the antithesis of these things for people who suffer greviously from them, then the year of the Horse has been a year of positive and promising development in Hong Kong. The anonymous observer of whom we wrote last year would not be disappointed if he climbed again to his vantage point looking across the harbour to the Nine Hills. Some at least of the grey-brown expanses of hovel-roofs have gone. And in their place are high white blocks, their vertical line broken by vari-coloured balconies, efficient, orderly and safe. They are crowded, indeed, but crowded with people many of whom had little reason to expect the treatment they have received and who may well form the nucleus of a valuable new community.
Quite apart from the strain and suffering brought about by the fire disasters mentioned above, 1954 was a trying year for everyone because of the acute shortage of water. There are no large rivers or lakes in the Colony and rainfall impounded in reservoirs constitutes the sole supply. The total rainfall recorded at the Royal Observatory amounted to only 53.82 inches which is 30.82 inches below normal, and the reservoirs were never fully replenished. For two months of the year the supply was reduced to four hours a day and for five months to only three hours a day and this meagre ration was still in force at the end of the year. A daily domestic routine of filling baths and buckets with water has become a regular feature of the life of rich and poor alike, and it is borne with an equanimity which surprises visitors to the Colony. The progress made in the construction of the Tai Lam Chung Reservoir is therefore watched with great interest and, at the end of the year, it was estimated that the reservoir would be in use by 1957. When fully operating Tai Lam Chung will supply almost as much water as all the other reservoirs together.
The health of the community during the year was good, and bearing in mind the immense health problem created by the destitution of about one hundred thousand persons in an abnormally hot and dry year, this fact is a measure of the efficiency of the departments who deal with health and sanitation in the Colony. There were no large outbreaks of serious contagious diseases and the main health problem was once again tuberculosis, although for many years every effort has been made to stamp out the disease. An interesting but tragic problem has arisen in connexion with the Colony's lepers, the majority of whom live in a leper colony run by the Mission to Lepers on a small island a few miles from Hong Kong Island. Lepers can be taken into the leprosarium, treated and cured, but the dread and loathing with which the Chinese people regard this disease and the irradicable stigma of the leprosarium make it almost impossible for a cured leper to return to, and live amongst, his relatives and friends. Unfortunately this attitude of mind also conveys itself to the victim, as it were, in the reverse, and the result has been that many lepers at the leprosarium, though cured, have refused to be discharged. Although the rehabilitation of a few cured lepers seems a small matter compared with the immense problem of resettling the squatter population, it may in the long run be more difficult to solve, for the main obstacle to its solution is not finance but the ignorance and prejudice of the community. These facts have brought about a radical change in Government's policy towards lepers. It has been accepted that the former policy of segregating lepers from the community was creating a growing rehabilitation problem. Now it has been decided that treatment will be given to lepers in out-patient clinics unless they are badly disfigured.
The statistics of births and deaths for 1954 and previous years show without question that Hong Kong, in common with most other Far Eastern countries, has a population problem. In Hong Kong the health of a traditionally prolific population is protected by a technically proficient medical organization with the result that many children are born but few people die. If the present rate of increase continues it is likely that the population of Hong Kong will exceed 3½ millions by 1964. The figure gives no cause for alarm, but it has given rise to some concern in the Education Department which is faced with the problem of providing means of education for the children of this multitude. Although in the year ending on 30th June, 1954, fifty new school buildings or extensions were opened to provide for some 14,560 pupils, more schools and more teachers are badly needed. The shortage of graduate teachers will be relieved to some extent by the maintenance grants and bursaries scheme which came into operation in 1954. The declared object of this double scheme is to enable needy students of merit to take a degree at Hong Kong University and a Teacher's Diploma. When the scheme is in full operation about 35 graduate teachers will be entering the profession each year. Nor has higher education been forgotten, for in 1954 Government, acting upon the recommendations made by Sir Ivor Jennings, Vice Chancellor of the University of Ceylon and Dr. D. W. Logan, Principal of the University of London, increased the recurrent annual grant to the University from $1½ million to $4 million and in addition approved a capital grant of $3 million.
A link with the Colony's past history was almost severed this year when the reclamation of nine acres of land on the waterfront of the Central District of Victoria terminated the active life of the old Queen's Pier. The pier itself has yet to be demolished but despite its rather ponderous archway many residents will regret the passing of this structure where more than half of the Governors of the Colony, and many distinguished visitors, have first stepped onto Hong Kong soil. Two other reclamations of a rather different character were approved during the year and the familiar work of winning back the land from the sea has already begun on one of them. The first is the reclamation of a promontory over 1½ miles long by 800 feet wide projecting into Kowloon Bay to take a runway which will enable modern types of aircraft to operate in Hong Kong by day and night. This bold step will enable Hong Kong to attain in air communications that same high reputation that its magnificent harbour holds in sea communications.
The second important scheme is a large reclamation at Kun Tong on the north eastern side of the harbour which is to be used for industrial sites. In recent years Hong Kong has had to rely much less upon its old staple, the entrepôt trade, and much more upon its own resources of labour and initiative in order to make a living. This has been achieved by a very remarkable expansion of the manufacturing industry, and whereas at the beginning of 1948 there were 1,275 registered and recorded factories and workshops with 64,500 workers, at the end of 1954 both these figures had almost doubled. Details of the increase in the export of goods manufactured in Hong Kong is given in the summary of the economic situation in the next paragraph but a rather unwelcome confirmation of the success of Hong Kong manufactures is the unjustifiable and ill informed criticisms which have been directed against Hong Kong products appearing on the English markets. Notwithstanding this, Hong Kong textiles, enamel, aluminium and plastic ware, umbrellas and rubber shoes are finding a ready market and a good name in many countries. The site at Kun Tong, which is away from the city's residential area yet conveniently situated for transport, should permit a further considerable expansion of Hong Kong's manufacturing industries.
In 1847 the Governor, Sir John Francis Davis, caused to be buried under the foundation stone of the Colonial Secretariat, then about to be constructed, a metal cannister containing Victorian coins dated 1843 and 1844 and the engraved brass plate which is illustrated opposite page 13. These were discovered in January when the old building was demolished. It is now learned with interest that the old Secretariat, which was built clearly belonged to an age more leisurely than our own was to cost £14,300 3s. 10d. The new Central Government Office which has less character but more activity than its predecessor, and contains many of the departments of Government as well as the Colonial Secretariat, was about one-third finished at the end of 1954.
There were no significant changes in the Colony's economic position in 1954. Commodity prices were slightly lower and the volume of visible trade was maintained at more or less the same level as last year. Imports and exports for the last four months of 1954 showed promising gains and the figures exceeded those for the corresponding period last year by $132 million (£8 million). Once again the mainland of China was the Colony's major supply source and best customer. China supplied 20 per cent of the Colony's total imports and took 16 per cent of total exports. The corresponding percentages last year were 22 per cent and 20 per cent respectively.
The values of imports and exports which may be compared with the 1953 figures in brackets were:—
| Year | Imports | Exports |
| 1954 | $3,435 million = £215 million | $2,417 million = £151 million |
| 1953 | $3,871 million = £242 million | $2,734 million = £171 million |
In spite of an estimated 10 per cent drop in export prices the total value of exports of Hong Kong manufactures rose by 7 per cent. This compares favourably with the United Kingdom where the increase was 4½% and with the whole world where the average increase was 6%. The most outstanding increase was in Japan with 17 per cent, and Japan is the Colony's keenest competitor in overseas markets. The main gains in Hong Kong exports last year were cotton piece goods ($20 million), enamel ware ($16 million), electric torches ($8 million), shirts ($8 million) and footwear ($7 million). To overcome import restrictions in certain countries in South East Asia, some Hong Kong manufacturers are establishing factories in these countries. There are already seven factories in Indonesia financed from Hong Kong and ten more are under construction. Sixteen factories have been built in Thailand, five in Singapore and two in Japan. This development has disadvantages as well as advantages.
More information about Hong Kong's trade and expanding industries is given in the chapters on Commerce and Production later in this report. The retail price index for all items (with March, 1947 = 100) fell ten points from 125 in December, 1953 to 115 in December, 1954. The following are comparative figures for the last years:—
| | March | June | September | December |
| 1951 | 117 | 119 | 121 | 120 |
| 1952 | 119 | 119 | 123 | 118 |
| 1953 | 115 | 119 | 130 | 125 |
| 1954 | 120 | 118 | 122 | 115 |
The rapid decrease in the last quarter of 1954 resulted from falls in prices of imported rice and from greatly improved supplies of other food-stuffs, mainly pork, poultry and eggs from China.
With one important exception there was little labour trouble during the year. The exception was the dispute between the Hong Kong Tramways Company and the Hong Kong Tramways Union which arose over the discharge of 31 workers who had become redundant as a result of technical reorganization in the Company. Batches of workers had been discharged on several occasions prior to this particular group but only formal protests from the Union had been received, it so happened, however, that this group included the Chairman and Vice Chairman of the Union. A campaign of agitation and recrimination was carried on by the Union, but it now seems to have spent its force without getting the expected degree of support from the workers, and the only inconvenience caused to the public was two short token strikes on the tramways and one 15 minute sympathy strike by motor bus drivers.
In the sphere of politics the unsettled situation in the Far East still gave cause for anxiety at times, but public confidence in Hong Kong was maintained. It should be stated, however, that Hong Kong's teeming population, busy earning its daily bread, is perhaps less worried by the delicacy of its position in the Far East than outside observers. Despite the failure to reach a political settlement in Korea, the continued détente there and the ceasefire in Indo-China, arranged at the Geneva Conference, brought a welcome respite from active hostilities in East and South-east Asia and hopes that further conflict might be avoided. Businessmen, however, remained cautious in their estimates of any relaxation of the restrictions still impeding the Colony's trade.
The agreement between Her Majesty's Government in the United Kingdom and the Central People's Government of China to the appointment of a Chargé d'Affaires with diplomatic status in London eased relations with that country to some extent, although so far as Hong Kong is concerned, the Chinese Government remained aloof. There were a number of frontier incidents, of which the most serious was the detention by the Chinese authorities in June of the yacht "Elinor" and its crew of nine Royal Naval Officers and ratings while on a holiday cruise, and the disappearance into Chinese waters of a Police patrol launch in July. After representations in Peking by H. M. Chargé d'Affaires both the yacht and its crew and the launch were, in due course, returned by the local Chinese authorities to Hong Kong.
On July 23rd, to the alarm and dismay of people all over the world, a Cathay Pacific Airways passenger aircraft on a flight from Bangkok to Hong Kong was shot down by Chinese fighters off Hainan Island with the loss of ten lives. The Central People's Government admitted responsibility and have now paid compensation amounting to £367,000. But the case of the Royal Naval launch fired on in the Pearl River Estuary in September, 1953, and the claim for compensation lodged with the Central People's Government by Her Majesty's Government, is still outstanding.
Interference with British merchant shipping bound to and from Hong Kong by vessels under the control of the Chinese Nationalist authorities in Formosa has continued and, as before, H.M. ships gave protection where possible and protests and claims were lodged with the Nationalist authorities.
Relations with the neighbouring Portuguese Colony of Macao have remained close and friendly. The Governor of Macao, Rear-Admiral Joachim Marques Esparteiro, spent two weeks' holiday in the Colony during the summer, and the decoration bestowed on him later in the year by his Government gave pleasure here.
The visit to the United Kingdom, after the Geneva Conference, of a trade delegation from the Central People's Government was followed with interest, and a number of firms with Hong Kong interests were represented on the British Trade Mission which visited Peking in November. Although the value of contracts signed by members of the mission was not high, the contract made with Chinese commercial interests has been welcomed by local businessmen and it is hoped that this may open the way for an increase of mutual trade in non-strategic commodities.
Hong Kong is the principal point of contact between Communist China and the democratic world. It also provides a vantage point from which the curious can look at the mainland of China. Amongst important visitors in transit was the Rt. Hon. C. R. Attlee, O.M., C.H., M.P., the Leader of the Opposition in the House of Commons, who was leading a Labour Party delegation to Peking, consisting of eight members, including Dr. Edith Summerskill, Mr. Aneurin Bevan and Mr. W. Burke. Mr. Chou En Lai also stopped in the Colony briefly on June 30th on his return to China after the Geneva Conference. Another visit by Members of Parliament was made in September by a delegation of the Commonwealth Parliamentary Association led by the Rt. Hon. R. Assheton. This included Sir Roland Robinson, Sir Robert Boothby, Mr. Percy Morris and The Rev. R. Sorenson. Their desire to see conditions in Hong Kong and to understand the complex problems of the Colony was greatly appreciated. A further delegation of the Commonwealth Parliamentary Association including Lord Baden Powell and Lord Noel Buxton and six Members of Parliament stopped for a short while in December. Lord Rowallen, the Chief Scout, spent a week in the Colony in September. Several visitors came from Colonial Office to observe the work of Government; Sir Thomas Lloyd, Permanent Under Secretary of State for the Colonies, and Lady Lloyd in January, Mr. W. H. Chinn, Social Welfare Advisor to the Colonial Office in May, and in December, Sir John Martin, Assistant Under Secretary of State for the Colonies. Representatives of the film world were Mr. Danny Kaye on a goodwill tour for U.N.I.C.E.F., Miss Ava Gardner and Mr. Clark Gable.
In addition to the various public figures who have visited Hong Kong, there has been an increasing flow of visitors to the Colony on holidays, business and shopping. A survey carried out during the year to assess the magnitude of the tourist traffic suggests that the business value of tourism to the Colony at the present time is not less than $145 million per year and that, given the right encouragement, tourism could become one of the Colony's leading industries. Action is being taken to promote overseas publicity for Hong Kong.
The Governor of Hong Kong, Sir Alexander Grantham, G.C.M.G. and Lady Grantham, left the Colony on home leave in May and returned via the United States of America where the Governor gave a number of lectures to promote an understanding of the Colony's problems in that country. During his absence the Colony was administered by Mr. R. B. Black, C.M.G., O.B.E. whose appointment as Governor of Singapore in succession to Sir John Nicholl was announced in December.