store plastics and also make ice for sale. It was a dismal flop and Mr.
Ting hurried down the following year to untangle the snarls. He soon
discovered that he had, in effect, enrolled himself for a cram course in
refrigeration engineering, but he learned enough to make the plant pay.
Today the North Point plant, greatly enlarged, employs 1,300 people
and makes 400 different plastic items. Its four-story building of
prestressed, reinforced concrete backs into a rocky hillside which is
being blasted away to make room for a new ten-story plant. Mr. Ting
trains all his own workers, pays them straight wages instead of the usual
piece-work rates and hands out annual bonuses, in some instances, equal
to ten months’ pay.
Operating on the general premise that he’ll try anything until he makes
it work, Mr. Ting designs many of his own products, and if he can’t find
a machine to make it, designs that also. One machine molds a plastic
automatic pistol and its bullets in a single operation; the model is so
precisely fitted that it works as smoothly as the original gun. Other
machines mold a pair of binoculars with one press, then equip it with
accurate lenses stamped out of clear Styrene plastic. A plastic doll,
including the eyes, is pressed out in seconds, but the mold has been
carefully developed from a hand-made clay original that is reproduced
first in plaster of Paris and then in polyester before the steel die is
cut. Dressing the dolls keeps 100 girls busy at Kader sewing machines.
The plant works three shifts daily, but Mr. Ting sleeps through one shift
at his penthouse on the roof. His latest venture is transistor radios,
jointly undertaken with a Japanese electrical appliance company.
“We can compete with anything except junk,” Mr. Ting said. “If Hong Kong
turns out quality products at reasonable prices, we can gradually raise
the living standards of our labor to the level of other countries. It
can’t be done overnight; they tried it in Red China and failed.”
P. Y. Tang, head of the South Sea Textile Manufacturing Co. at Tsuen Wan,
is an engineering graduate of the Massachusetts Institute of Technology
and the largest producer of cotton yarn and grey cloth in the colony. His
main plant covers nine acres along the waterfront and contains 45,000
spindles and 900 looms. Its employed force numbers 2,100.
Tsuen Wan, now an industrial center with more than 60,000 residents,
was a village with a few huts and no roads when Mr. Tang erected a
pilot plant there in 1948. He had brought 300 technicians and skilled
workers, plus his own administrative experience as managing director of
the gigantic Ching Foong Cotton Manufacturing Co. in Shanghai and other
cities of China.
Experience was not enough; Hong Kong had practically nothing to help the
mill get started—no cotton, power, spare parts, skilled labor or parallel
industries, such as weaving and garment-making, that could use yarn and
doth. There was no local market and the humid climate quickly rusted the
machinery.
Mr. Tang beat the rust problem and shaved his operating costs by keeping
the machines in continuous use, running 8,500 hours a year, compared
with 3,700 hours a year in German mills and 1,500 hours in English ones.
He opened up new markets for his prolific output in Great Britain, the
United States, Australia, Africa, and elsewhere. His early sales were
made at a loss, but with his markets established and Red China knocked
out of the market by the U.N. embargo, South Sea sales and profits soared.
The main plant is completely air-conditioned, reducing summer working
temperatures by twenty degrees. The spindles and looms, imported from
Japan, England, Switzerland and the United States, are the finest
obtainable. Much of the carding, combing, and sizing machinery is fully
automatic, tended by Chinese girls in their early twenties. Some of the
girls appear to be prematurely grey, but it’s nothing more than loose
cotton that has settled on their black hair; all wear breathing masks to
protect their lungs from floating cotton. Every phase of the operation is
under strict quality control, preserving the uniform diameter of the yarn
and testing its tensile strength.
The South Sea plant sometimes disconcerts visiting textile executives,
who expect a Hong Kong textile mill to look like an over-extended cottage
industry. What they find here, and in several other Hong Kong mills, is a
streamlined efficiency equal to the best in the world.
The young men and women employees, most of them single, live in free
dormitories near the plant, pay an average of 27 cents a day for meals
and have a choice of Cantonese, Shanghai or Swatow cuisine. They have
workmen’s compensation, a barber shop with electric hair-dryers for
the women, a vocational training program, and for high-performance
workers, a lounge and recreation center. The plant is non-union, with a
six-day, 48-hour week. Wages are slightly above the colony average for a
registered factory, ranging from $1.38 to $2.25 a day.
Mr. Tang has been in the thick of the fight to protect the colony’s
textile industry from demands—especially clamorous in England and the
United States—that its exports be reduced.
“I just can’t see the wisdom of Western powers in restricting Hong Kong
textile exports,” he told David Lan, a reporter for _The China Mail_, a
colony daily. “We have no hinterland or diversified industries to which
refugees may turn from a threatened textile industry.”
“From 1959 through 1961, total colony exports of cotton piece goods were
less than 5 percent of Great Britain’s production, and 0.53 percent of
United States output,” he stated.
“We are asking for no aid but only a fair chance to trade,” he said.
John Tung, third of the alliterative industrial Taipans, has been
connected with the colony’s metalware industry since 1937. Like Mr. Tang,
he was the son of a Chinese industrialist. His father started the I. Feng
Enamelling Company in Shanghai shortly after World War I and established
a Hong Kong branch in 1937. John, working part-time for his father while
he attended the University of Shanghai, left both school and job and
founded his own firm, the Freezinhot Bottle Co., to manufacture vacuum
flasks. By 1940, he, too, set up a Hong Kong branch. When the Communists
expropriated Shanghai industries, he moved to the colony to direct both
the I. Feng and Freezinhot branches.
The I. Feng enterprise prospered, and in the familiar Hong Kong pattern,
dozens of small operators rushed in to cut some of the pie. By 1956 there
were approximately 30 of them in the field and Mr. Tung had to cut back
his production. The marginal companies went broke in the glutted market,
but I. Feng remained the largest in its line. Mr. Tung proceeded to build
the Freezinhot bottles by handling all the manufacturing processes in
his own plant, instead of the usual practice of contracting them out,
and successfully invaded Japanese markets in Africa, Latin America and
Southeast Asia.
Like many other Hong Kong manufacturers, he set up subsidiary companies
outside the colony. Bet-hedging is widely practiced among colony
entrepreneurs; the economic climate is unpredictable and no one wants
to be caught flat-footed. In the colony, Mr. Tung also runs a firebrick
works, a marble plant and a trading company, shuttling daily between his
various offices.
He takes a coolly realistic view of tomorrow’s prospects, declaring that
the market for enamelware and vacuum bottles in underdeveloped countries
will drop when hot running water, electric percolators and refrigerators
make his products less useful, or the countries develop their own
industries to meet the need. He probably would not be offended if his
potential competitors subscribed to this pessimistic outlook.
Mr. Tung’s survival in the 1956 enamelware boom illustrates a recurring
weakness in the colony’s economy, the perennial, headlong dash to make a
fast dollar. The urge is irresistible, with new industries coming over
the horizon and eager money lying in wait for them. At the first sniff
of profit, the money swarms into the latest bonanza, fresh companies
pop up like dandelions and products flood the market. Older firms slash
prices repeatedly to meet each competitive assault; presently, the bottom
falls out and half the old and new companies disappear in a welter
of bad debts. The frantic cycle has swept through the apparel, film,
glove, plastic flower, and enamelware industries without losing any of
its momentum or lure. It is often and justly deplored, but in Hong Kong
it will always be difficult to find an investor panting to turn a slow
dollar.
The race for a quick profit careens along at a perilous pace in the
colony’s building industry, where the investor in a large apartment
or office building may get all his capital back within four years,
or go broke in six months. The industry moved ahead at a moderate
$25 million-a-year rate until about two years after the post-embargo
manufacturing boom began. Then it took off, reaching a new record of
$42,000,000 in 1959. In 1960 it shot up to $69,000,000, and held the
steep angle of climb into 1961.
It is the building aspect of Hong Kong’s industrial spurt that strikes
every visitor at once. A skyscraper bank building and two hotels, of
600 and 1,000 rooms respectively, are going up in the central business
district of Hong Kong Island. There is hardly a square block in the main
business area where there is not at least one building under construction.
The transformation of the Tsim Sha Tsui section at the tip of Kowloon
Peninsula is even more startling. In the 1920s, it was predominantly a
quiet house-and-garden neighborhood strung along both sides of Nathan
Road, the main north to south street. The Peninsula Hotel opened at the
south end of Nathan Road in 1928 to become the new social center of the
colony, and its Peninsula Court annex was added in 1957.
During the 1950s, Tsim Sha Tsui slowly became an area of small hotels and
luxury shops catering to tourists. An epidemic of building fever swept
over it in 1959, and the place will never be the same again. Three huge
hotels—the Ambassador, Imperial and Park—opened in 1961 with a total
of 1,025 rooms. Two years later, the 800-room President was to join
the Kowloon tourist parade. Tall apartment buildings, reaching almost
as high as their rents, and an assortment of compact luxury hotels,
sprouted through the thick crust of tourists and shoppers. Guests at
the top of the newly opened Imperial Hotel looked down on a scene of
general devastation at the opposite side of Nathan Road; dozens of old
structures being demolished to make way for larger and more expensive
ones.
New hotels opening throughout the colony in 1963 will add 3,368 rooms,
doubling its tourist capacity. Many of them will show the familiar marks
of speculative building—undersized rooms, insufficient elevator service,
thin walls and cracked masonry. The best hotels will stay the course,
but the merely flashy ones may be pulled through the same wringer as the
overly eager, overnight speculators in other industries.
The construction industry, which employs 160,000 people, roughly
estimated, was also active in less speculative projects. From 1957
through 1961, it erected more than 200 factories, many of them on
reclaimed land. Government construction on water-supply facilities,
land reclamation, and resettlement estates ran just over $40,000,000 in
1960-61, and was scheduled to increase considerably in the next fiscal
year.
All of the large new hotels in Hong Kong were built to serve a tourist
trade which could scarcely have supported three of them in 1940. For
well over a century, Hong Kong had about as much tourist appeal as the
islands of Langerhans; and in its early days, the English used to sing a
derisive song, “You can go to Hong Kong for Me.” In the popular mind, it
was associated with such disagreeable phenomena as rainstorms, typhoons,
floods, pirates, malaria, bubonic plague, squalor and poisoners. Most
of these scourges have disappeared, but it took travelers many years
to forget them. People went to Hong Kong only on government or private
business or because, being either rich or retired, they had been
everywhere else and wanted to add one more odd-sounding place to their
itinerary.
Distance alone was a formidable obstacle; by today’s shortest air route,
Hong Kong is 10,611 miles from New York and 7,286 miles from London.
It was much farther by ship, and it took weeks to get there. Imperial
Airways opened the first regular airline service from Europe in 1936,
and Pan American World Airways started weekly transpacific flights in
1937. Early flights from New York or London still required a week, more
or less, and although faster piston-engined planes gradually pared down
the time, it took the introduction of jet airliners in 1958 to cut the
longest flights to approximately 24 hours.
The new Kai Tak Airport, whose 8,350-foot runway juts into Kowloon Bay
on a strip of reclaimed land, opened on September 12, 1958, six weeks
earlier than the first oceanic jet passenger service. Scheduled ocean
liners and cruise ships continue to call at Hong Kong, but four-fifths of
all tourists arrive by air at Kai Tak. More than 210,000 of them came in
1961, with Americans and residents of the British Commonwealth comprising
the two largest groups. Not included in this total are the 132,000
members of the American armed forces who had shore leave in the colony
during 1961. For many years they have been the largest group of colony
visitors; liberal spenders and generally law-abiding.
After ignoring Hong Kong effortlessly for decades, Americans had their
attention drawn to it by a variety of stimulants. Hollywood motion
pictures such as _Soldier of Fortune_, _Love Is a Many-Splendored Thing_,
_The World of Suzie Wong_, and _Ferry to Hong Kong_ were of varying
artistic merit, but they all helped the tourist business. Television,
radio and film personalities—Arthur Godfrey, William Holden, Jack Paar,
Ed Sullivan, and David Brinkley—presented documentary reports on the
colony. There was even a television adventure serial about Hong Kong,
but with the exception of a few on-the-spot film clips spliced in for
authenticity, it dealt with people, places and customs unknown to any
colony resident.
Tourism stands next to the textile industry as a source of foreign
exchange and it has created thousands of jobs for hotel and restaurant
workers, entertainers, guides and shop clerks. Recognizing its economic
value, the colony government set up the Hong Kong Tourist Association a
few years ago. The association beams its Lorelei serenade to tourists
overseas, but in its own yard, it functions as a watchdog. Its warning
yip is brief: Don’t flim-flam the tourists, or you’ll kill a $120
million-a-year industry.
Transportation facilities in and out of the colony are equipped to handle
any foreseeable increase in freight or passenger traffic during the next
few years. Seventy-six shipping lines sail to 234 ports around the world.
Nineteen airlines operate out of Kai Tak, with the four busiest—Cathay
Pacific (chiefly regional), British Overseas Airways, Pan American and
Japan Air Lines—averaging two or more arrivals and departures every day.
No one has the exact figures on how many people are employed in all the
industries of the colony beyond the registered and recorded factories and
including every category. But 1,200,000 have some sort of job, whether
working at home, in factories, on farms, at sea or for the government.
Government employs about 50,000.
There is no minimum wage. Most workers are paid by the day or on a
piece-work basis. Normal daily wages of industrial workers are 50
cents to $1.30 for the unskilled, $1.20 to $1.70 for semiskilled, and
$1.30 to $3.50 for skilled men. Women get 30 percent less than men.
Overtime is at time and a quarter or time and a half, with the latter
prevalent. Incentive pay is given for good performance and attendance.
Some companies provide free or subsidized food to compensate workers
for cost-of-living jumps. A bonus of one month’s wages is paid by many
companies just before the Chinese New Year.
As a rule the European firms and a few westernized Chinese firms provide
a cost of living allowance on top of the basic wage. Yet in spite of
rapid industrial expansion, inflation has been slight; the index rose
only 22 points between 1947 and 1961. The eight-hour day and six-day,
48-hour week are observed by most European companies, but some Chinese
companies have an 11-hour day. Women and all workers under eighteen are
given a second rest day a week by law. Many big companies, especially
those dealing in textiles, provide dormitories and free bedding for
unmarried workers; some house the families of married workers, and the
government encourages this practice by providing land for such quarters
at half the market price. A few companies provide recreation rooms and
free transportation to and from the job. Workmen’s compensation insurance
has been prescribed by law since 1953. Women, as well as children under
fourteen years old, may not work between 8 P.M. and 7 A.M.
Hong Kong wages look tiny to an American worker who earns more in an hour
than a colony factory hand receives in a day. But the chasm between the
two standards of living is not so vast. The Hong Kong worker takes the
bus, streetcar or ferryboat for less than two cents a ride; his lunch
costs about ten cents, and his month’s rent is under $5.00 if he lives in
a resettlement estate, and below $23 a month if he occupies a low-income
Housing Authority development unit.
There are 245 labor unions in the colony, but they lack biting power
in wage negotiations. Three have more than 10,000 members each: the
seamen’s union; the spinning, weaving and dyeing workers; and the motor
transport workers. These three, with the unions of the seafarers, workers
in Western-type employment, restaurant and café employees, government
workers and teachers, represent 40 percent of all union membership.
The unions split into a pro-Communist Federation and a pro-Nationalist
Council. The pro-Red unions are strongest among seamen, public utilities,
shipyards and textiles; the anti-Reds are most influential in the
building trades, food and catering and numerous small industries. Only
25 of the 245 labor unions are free of political leadership. Collective
bargaining is generally confined to the transport, printing, and
enamelware industries, and to taxi drivers.
Most wages are set by agreement between the worker and his employer;
the agreement is verbal and follows no uniform wage-scale. Family
connections, references from friends, or the contracting system are
used to get jobs. Except in the large shipyards and textile mills, the
apprentice system is mostly a matter of observation and imitation.
Several private trade schools train boys and girls in various jobs, and
Hong Kong Technical College and Hong Kong University teach engineering,
commerce and highly advanced technical specialties, with the university
giving a full range of professional training. But when all are combined,
they fall far short of the demand.
The majority of the colony’s industrial workers impress both employers
and outside observers as industrious, purposeful, capable and
intelligent. They are unwilling to make bold, independent decisions, some
employers complain. On the other hand, they are seldom encouraged to do
so.
In the last few years, an increasing number of American businessmen
have found the risks and rewards of the colony’s economy well worth
their interest. The first American trading concern, Russell & Co., was
established there in 1850, but the road was rocky, and Russell, along
with several later Yankee traders, faded out of the picture before 1900.
About a dozen American companies located agencies in Hong Kong in the
early 1900s. Most notable of these was the International Banking Corp.,
which opened a Hong Kong branch in 1902; after a series of mergers and
name changes it became a major branch of the First National City Bank
of New York, occupying its own large building in the central financial
district.
Except for First National City, Singer Sewing Machine Co., National Cash
Register Co. and a few others, most of the American offices were agencies
or area representatives until the last decade.
Anker B. Henningsen, a Montana-born businessman of Danish ancestry, came
to Hong Kong from China, where his family had been in business since
1913. With his son A. P. Henningsen, he heads a group of companies that
distribute Coca-Cola and other soft drinks, export and import women’s
wearing apparel, run a quality dress shop called Paquerette, Ltd., and
act as agents for a number of American chemical, pharmaceutical and
manufacturing companies. They employ 300 people.
The older Henningsen’s father, a Danish immigrant to the United States,
had built a prosperous produce business in the Northwest and later
supplemented it by shipping eggs from China to the U.S. Eggs came
in by the boatload until his competitors sabotaged the business by
circulating the canard that the Chinese eggs were hundreds of years
old. Mr. Henningsen turned then to Europe for his primary market, but
his American produce operations took a beating in the 1919 to 1921
depression. A. B. went out to China in 1923 to start his own ice cream
and frozen-drink-on-a-stick business. He had to install refrigeration
units in all his retail outlets, working out of a central plant with
3,000 employees. In cold months, he packed and shipped eggs; in summer,
he made and sold 125,000 frozen suckers a day. Sticks for the suckers
were stamped out of Idaho pine planks, shipped from the U.S. in the form
of heavyweight packing crates to avoid lumber duty. It was no small item;
the Shanghai plant used 250,000 board feet of Idaho pine a year.
In 1933 he set up a dairy business, imported 500 head of American cattle
and a full line of equipment for a modern dairy farm. A few years later,
Japanese bombers killed the entire herd. He was president of the American
Association and the American Chamber of Commerce in Shanghai when he and
1,500 other Americans were interned by the invading Japanese. As head of
the American business community, he was permitted to organize a hospital,
school and food facilities for the prisoners. Repatriated to the United
States in September, 1943, he operated a dried-egg plant for the Army
during the rest of the war. He returned to China after the war, and ran
produce and export companies until the Reds began to gain control of the
country. Liquidating his interests in China, he came to Hong Kong and
organized a soft-drink bottling company in 1948.
He and his son extended branches to Japan, Korea and Taiwan, but closed
them down after a time, he said, because he could not find executive
personnel capable and willing to run them. He expects Hong Kong to
survive and prosper, despite the ever-present threat from Red China.
“Hong Kong is China’s best source of foreign exchange,” Mr. Henningsen
says. “If the Reds took it over, the whole economy would collapse, just
as it did in Shanghai. The Communists have mismanaged their food supply
so badly that their people can’t work. All they get to eat is a small
rice ration, a few vegetables, very little fish and no meat at all. If
people are underfed, they just die on the vine.”
Robert J. Newton, another native of the American Northwest, has
established his own prosperous business in the colony. Born in Salem,
Oregon, he worked as a construction engineer in California, Hawaii and
the Philippines. He made his first Hong Kong visit in the early 1930s,
found it easy to do business with the people there and was deeply
impressed by the skill of its workmen. He returned to the colony often in
succeeding years.