praised for the quality of his craftsmanship. But it was not until the
1950s that he began to consider boat construction as a possible business.
His two sons, Whitney and John, became his associates, with John heading
a distributorship for Bireley’s soft drinks. Whitney became the manager
of American Marine, Ltd., the boat-building yard established by his
father.
In 1958, the company set up operations in a tin-roofed shed that was not
much larger than a two-car garage. The yard site was along the shore of
an inlet on Clear Water Peninsula, nearly five miles due east of Kowloon.
Well away from other industrial areas, it lay just across Junk Bay from
the Chinese Nationalist refugee settlement at Rennie’s Mill Camp.
American Marine, which produces pleasure boats for the American market,
outgrew its corporate cradle in a few weeks; its present shed is 500 feet
long and 300 feet wide, and will be doubled in area during 1962. The
company turns out 40 to 50 yachts a year, selling from $7,000 to $70,000
each. Mr. Newton and his son are the only Americans in the company; all
of their 300 workmen are Chinese.
Mr. Newton’s basic assumption was that he could produce a sailboat,
modified luxury junk, motor sailer, or power cruiser to the finest
design specifications, ship it to the United States as deck cargo on a
freighter, and still undersell American boat-builders by a fair margin.
The idea appears to be sound. His yard crew is working on 30 boats at a
time and expects to raise its annual output to 80 or 100 boats a year
when the enlarged shed has been completed.
Wood for his boats comes from many countries—Sitka spruce, for spars,
from the American Northwest; teak from Thailand; and other hardwoods from
Borneo and mahogany planking from the Philippines. Engines and fittings
come from the United States. The largest of his boats to date is a
59-foot motor sailer, and all are built to the specifications of American
marine designers and architects such as Sparkman & Stephens, Inc. of New
York, and William Lapworth of Los Angeles. It takes six to eight months
to finish most boats.
One problem he has, Mr. Newton explains, is training Chinese workmen to
use power tools. Ten years ago power equipment was a great rarity in the
colony; now American Marine has 50 electric drills, planers, bandsaws and
a bolt-threader. Some of his workmen had never seen a power tool before
they were trained to use them at the boatyard. Whitney Newton’s ability
to speak Cantonese is helpful, but the instructor has to proceed with the
utmost caution in introducing a greenhorn to a bandsaw.
American Marine builds a few modified junks, using American equipment
and finishing them like yachts. The three masts of the typical Chinese
junk are retained, but the rigging is simplified and the usual ponderous
rudder is greatly reduced in size. They sell for $10,000 or more. The
Newtons built one for Don the Beachcomber, Hollywood restaurant owner.
Americans are often infatuated with the romantic outline of a large
working junk, but they would soon go aground trying to handle its
complicated sails.
American Marine follows the Chinese practice of paying one month’s
bonus to its workers at the New Year. Trucks carry the men to and from
work. A barracks and mess hall accommodate those who live at the yard.
The hamlet of Hang Hau, half-destroyed by fire years ago and still in
ruins, was American Marine’s only neighbor in 1958. Now there is a mill
for cold-rolled steel and a ship-breaking shop, with the light-colored
buildings of Haven of Hope Sanatorium arrayed along the hills of the
opposite shore.
Mandarin Textiles, Ltd., best known in the United States for its Dynasty
line of high-styled women’s apparel, is also directed by an American,
Linden E. Johnson. Mr. Johnson, who served with the U.S. armed forces
in China during World War II, stayed on to become a Shanghai textile
executive. When the Reds drove him out of China, he came to Hong Kong
and founded Mandarin with a Chinese partner who was murdered by a
fellow-Chinese in 1957. Mr. Johnson kept the business going, completed an
eight-story plant in Kowloon, near Kai Tak, in 1958, and expanded it into
one of the colony’s finest tailoring and designing houses.
Mandarin, which makes the Empire line in cottons in addition to the
Dynasty silks and brocades, employs up to 1,300 workers. It provides a
recreation room, catered meals and classes in English for its work force.
Most of its permanent staff are highly skilled people, like the young
sewing-machine operator who stitches intricate rose and tea-leaf designs
on quilted fabrics at high speed, working from memory with unerring
accuracy. The cutters, tailors, and pressers are advanced craftsmen,
trained by long apprenticeship.
Mandarin introduces about fifteen new silk and brocade patterns each
year, originated by its own designer, Doris Saunders, with such names
as Cherry Blossom, Ivory Blue, Sing Song and Garland. Its stockroom
carries nearly 500 patterns, including as many as eight different color
variations on a single pattern. Wives of visiting VIPs often tend to go
haywire when exposed to this exciting inventory, and have had to be led
or dragged away from the shelves. Most of the brocades are woven by the
Fou Wah mills in Tsuen Wan. Finished garments are packed in waterproof
paper and special shipping boxes and sent to the U.S. by air express or
sea freight.
Mandarin keeps its finger on the high-fashion pulse through its Dynasty
Salon in the colony’s Hotel Peninsula, but it also cagily remains in
touch with a wider and less sophisticated market by noting what the
American sailors buy at its servicemen’s outlet in Wanchai, where the
fleet comes in.
Textiles have become the largest single factor in the colony’s economy.
Textile exports totaled $273.5 million in 1960, or 55 percent of the
colony’s entire domestic exports. In 1961, textiles constituted 52
percent of all exports. The industry employs 42 percent of all the
workers in registered and recorded industries. It has a capacity of
614,000 spindles and 18,700 looms.
All this is cause for rejoicing in Hong Kong textile circles, but to
textile producers in England, the United States and Canada, it is a
problem that becomes greater all the time. The United States absorbed 31
percent of the colony’s textile exports in 1960, and the British Isles
were a close second with 26 percent. Textile exports to the United
States took a sharp drop in 1961, while those to the British Isles showed
only a slight decline.
There was much concern among Lancashire mill-owners when Hong Kong
cottons began to hit the English market. American textile producers
and textile union leaders joined in a protest that was echoed with
lesser volume by the Canadian textile industry. In all three countries,
textile men declared that if they had to compete with Hong Kong’s low
wage-scales, they would be driven to the wall.
American textile producers have their own special complaints against the
Hong Kong industry. They point out that because of the existing price
differential, Hong Kong can buy U.S. cotton at 8½ cents less per pound
than American mills can, and that the colony has been stocking up heavily
on it. In 1960, Hong Kong imported 55 percent of its raw cotton from
the United States. The U.S. textile men say that while Japan’s textile
exports have been held down by a five-year quota limitation, Hong Kong
has rushed in to sell America the items that Japan agreed not to sell.
The demand for restrictions on colony textile exports to the United
States began in 1958. United States officials visited the colony in 1959
with a proposal for a voluntary cut in the exports. The Hong Kong garment
manufacturers proposed a three-year quota arrangement, starting in July,
1960, to hold exports to the 1959 level, plus 15 percent on cotton
blouses and blouse sets, shorts and trousers, sport shirts, brassieres
and pajamas. American textile producers immediately rejected the proposal
as far too generous to Hong Kong competitors.
During the negotiations, American importers placed huge orders with Hong
Kong to get in ahead of the threatened limitations. When the agreement
blew up, they found an interesting variety of reasons why they couldn’t
accept most of what they had ordered, such as late deliveries, and
unsatisfactory quality. Exports to the U.S. dropped and the decline
persisted into 1961.
In May, 1961, President Kennedy proposed an international textile
conference to work out some agreeable way to control textile exports.
The United States then suggested that Hong Kong cut its textile exports
at least 30 percent below the levels of 1960. But the word “quota” had
assumed a fearsome aspect in Hong Kong because of a textile agreement
involving the colony, England, India and Pakistan. Hong Kong had agreed
to limit its exports to the British Isles, provided that Pakistan and
India would do the same. In 1961, the Hong Kong industry began to suspect
that India and Pakistan might jump the traces, leaving the colony
interests holding the bag.
A large section of the Hong Kong press is rabidly pro-textile industry,
and every American move toward textile controls is headlined as a thrust
at the heart of the colony’s principal industry. Communist papers shoved
their way into the act by crying that American restrictions would starve
the refugee workers who left the People’s Republic of China to escape
that very fate.
After the July 1961 International Textile Conference at Geneva, the Hong
Kong government, following long bilateral discussions with the U.S.,
agreed to limit its exports according to the Geneva Textile Agreement,
with July 1960-June 1961 as the base year, and dividing the affected
export items into 64 different categories. Starting date of the agreement
was October 1, 1961.
Meanwhile, the United States Tariff Commission began to study the
8½-cents-a-pound cotton export differential at the direction of President
Kennedy. Genuinely alarmed, Hong Kong business groups hired Dean
Acheson, lawyer and former American Secretary of State, to represent them
before the Commission and help to retain the price differential.
The textile volcano erupted again in March, 1962, when the colony
government, acting under the one-year agreement that went into effect
the previous October, banned eight categories of textile exports to the
United States. The Hong Kong _Tiger Standard_, clamorous advocate of the
textile interests, excoriated the move as a prelude to economic ruin.
Pandemonium ran through the industry. The government ban was lifted
almost immediately. Prospects of a peaceful solution seemed as poor as
ever.
On September 6, 1962, the U.S. Tariff Commission voted to retain the
8½-cent export differential and rejected a proposal to raise the duty on
cotton imports. This action coaxed the Hong Kong manufacturers out of
their sulks, but it sent the American textile-makers into a fresh tantrum.
Hong Kong’s motion picture industry is one of the world’s most prolific,
and least-known, producers of feature films. More than 300 feature-length
pictures were made in 1961 by its six major studios and scores of
independent producers who rented working space from the big studios. All
were in Cantonese or Mandarin, aimed at the Overseas Chinese market in
Taiwan, the Philippines, Southeast Asia and elsewhere. Mandarin features
are generally based on heroic or historical themes, with rich costuming
and elaborate sets; each one takes 35 to 40 days of shooting and costs
around $40,000. A few Mandarin films have contemporary stories. Cantonese
films, usually drawing on time-tested plots from Cantonese opera, can be
run off in 10 or 15 days for less than $20,000 and are more popular than
Mandarin with the Hong Kong fans.
As might be guessed from their shooting schedule, many of these quickies
are rubbish. But the quality of the Mandarin films has improved, and a
few super-productions costing as much as $175,000 are made every year.
Hong Kong films have won top honors at the East Asian Film Festival for
the last four years.
The Shaw Brothers, Run Run Shaw and Run Me Shaw, bill themselves with
typical cinematic restraint as The Greatest Purveyors of Entertainment in
the Far East, and are the kings of the local industry. Late in 1961 they
moved their Hong Kong organization into a modern and elaborate studio at
Clearwater Bay in the New Territories. Its four sound stages were to be
increased to six within a few months, and its employed force numbered
several hundred, plus an equal number of low-paid extras.
Lin Dai, twenty-six-year-old beauty and box-office queen of the Shaw
Brothers studio, took the 1961 best-actress Golden Harvest Award. As the
highest-paid star, she earned $42,000 annually on a three-picture-a-year
contract. A singer, actress and dancer, she is stunning by any standards,
East or West, and the studio plans to release some of her best films in
the American art-theater circuit. Thus far, their American audience has
been restricted to Chinese-American viewers.
The Shaws, who also own studios in Malaya and a chain of 120 theaters in
Southeast Asia, began operations in Hong Kong three years after Grandview
Film Co. founded the local industry in 1933. After a slow start, the
industry boomed in the early 1950s, overexpanded and crashed, leaving
only four companies in the field by 1956. Pro-Nationalist studios such as
Shaw Brothers have no market in Red China, but there are a number of Hong
Kong film-makers who have a pro-Communist slant. Shaw’s new studio can
produce wide-screen pictures, overcoming one of the handicaps that has
limited the growth of the industry in the colony. Generally speaking,
there is still plenty of room for technical and artistic improvement.
The 1961 Hong Kong census reported a total of 337,000 women in all
the employed forces, yet women have played a disproportionately small
part in the direction of industry and public affairs until the last
twenty years or so. It is not surprising that Chinese women were
excluded from public life, since they had few rights outside their
homes until the establishment of the Chinese Republic in 1911. But
British women, presumably well-educated and qualified to take executive
responsibilities, found few opportunities to do so. The fact that Queen
Victoria ruled the colony for the first sixty years of its existence
should have helped, but it didn’t. What influence women had was unseen,
and was exerted through their husbands or other men.
Even today there is not one woman in the top echelon of Hong Kong
government, although women constitute about one-twelfth of the
government’s Class I and II administrative staff officers (more than a
third of these women are Chinese).
In nongovernmental posts, there are about ten women conducting their own
retail shops, chiefly in fashions, jewelry and objets d’art. Rosalind
Henwood, an American, heads an air freight forwarding business.
There are about a dozen women of prominence in writing, advertising and
publicity. Two of them, Mrs. Beatrice M. Church and Miss Elma Kelly,
direct their own advertising and publicity agencies. Mrs. Church, a
former Far Eastern correspondent for the _London Daily Mail_, survived
Japanese air attacks and ship-sinkings during World War II, served in the
SWANS, a women’s service affiliated with the British Navy, and returned
to Hong Kong to reestablish the pioneering advertising and publicity
firm she had founded with her husband, Captain Charles Church. Captain
Church, his health shattered by Japanese tortures during imprisonment
at Singapore, died of the effects of his injuries in 1950. Mrs. Church
assumed sole control of the business, the Advertising and Publicity
Bureau, and has successfully operated it since then. Miss Kelly, a native
of Melbourne, Australia, began her career as an analytical chemist.
She also was a Japanese war prisoner before setting up her own agency,
Cathay, Ltd., in Hong Kong.
There are about 20 women executives and administrators in private
or semipublic health and welfare agencies. Women staff officers in
government health and welfare work number approximately 150—by far the
largest group of women in civil-service staff posts. The colony has a
small number of women doctors, educators and lawyers, plus one architect,
but most women professionals in these fields are government officers.
Women employed in art or cultural activities total about fifteen,
including several Chinese movie actresses. Miss Aileen Woods, a colony
resident for nearly forty years, is widely known for her Down Memory
Lane program over Radio Hong Kong, which she conducted from 1947 to
1954. A Japanese prisoner in Hong Kong during the war, she subsisted on
a semistarvation diet of rice, fish and boiled sweet-potato leaves; her
weight fell to 81 pounds and many of her fellow prisoners died. Miss
Woods, now seventy-five years old and in excellent health, was honored by
a personal visit from Princess Alexandra of Kent during the Princess’s
tour of Hong Kong in November, 1961. She was awarded the Coronation Medal
in 1953, and the Member of the British Empire in 1958. She still does
occasional programs for Radio Hong Kong, a government agency, and is
regarded as the unofficial dean of the colony’s working women, having
begun her career as a world-touring featured dancer in the _Ziegfeld
Follies_ and other shows more than fifty years ago.
In private business and professional activities, as in government staff
positions, about one-third of the colony’s career women are Chinese, and
both groups of women have achieved much greater prestige and success than
any previous generation of the colony’s women. Among the Tanka fishing
people of Hong Kong, women own most of the fishing junks. On Po Toi, a
small island southeast of Hong Kong Island, a Chinese woman, who died in
1957, held the rank of village elder; as such, she was the arbiter of all
local disputes, having an authority rarely given to women. Many women
in the colony hope that the lady from Po Toi will become a trend-setter
instead of a legend.
What are the prospects for Hong Kong industry and trade? Among the
many persons who have weighed these prospects are three of the most
influential men in the commercial life of the colony: Hugh Barton,
chairman and managing director of Jardine, Matheson & Co.; Sir Michael
Turner, chairman, general manager and a director of the Hongkong &
Shanghai Banking Corp.; and John L. Marden, chairman of Wheelock, Marden
& Co. A listing of their combined directorships would fill two closely
printed pages, and it would be only a mild exaggeration to say that
they and the companies they head are in everything of a business nature
in the colony. Each man also holds an important position in the colony
government; Sir Michael as an unofficial member of the Executive Council,
Mr. Barton as an unofficial member of the Legislative Council, and Mr.
Marden with unofficial membership in the Urban Council.
Mr. Barton heads one of the oldest and most respected business houses
in Hong Kong, with financial or operational control of companies in such
diverse lines as real estate, shipping, wharves, warehousing, insurance,
utilities, textiles, transport, engineering, airlines and trading.
Jardine’s, as it is commonly called, was deeply engaged in the opium
trade during the colony’s early years, but has long since turned to other
interests.
One of its recent investments, the Jardine Dyeing & Finishing Co.,
was established two years ago and now produces two million yards of
high-quality cloth per month.
Barton believes that if the United States drops the 8½-cents-a-pound
cotton export differential, most of the cloth produced in Hong Kong will
not be able to compete in the world market. Of the 500 million yards
of cloth produced annually by Hong Kong, a relatively small amount is
exported to the United States.
However, Barton feels, removal of the 8½-cent differential would cripple
the local industry’s efforts to produce its cloth cheaply enough to
compete in the markets of Southeast Asia and elsewhere.
“Many people urge the textile industry to accept tight controls of its
exports, or they want our textile producers to diversify by going into
new industries,” he says. “But the imposition of such controls doesn’t
fit the character of Hong Kong, which has prospered because it is a free
port with a minimum of controls.
“Of course it is easy to advise diversification, but what about the
Shanghai textile industrialists who spent a lifetime becoming experts in
the business? The Hong Kong textile industry is built on that knowledge,
and it can’t be reconverted to some other industry overnight,” Barton
states.
He feels that some degree of diversification is certainly desirable, but
that Hong Kong cannot afford to drop its textile industry.
“There is a fresh Indonesian market for low-grade textiles produced
here,” he says. “And there are many good markets for Hong Kong’s made-up
cloth.”
He points out that local industry in many lines was hit by a 1961
substantial rise in shipping costs and port charges. In turn, the
shipping industry has taken a loss from the invasion of the dry-cargo
field by the super-tankers originally built to ship oil. Freighters,
tramp steamers, and ocean liners have all experienced a drop-off in
profits because of this invasion, he declares. Many new nations, partly
influenced by national pride and prestige, have launched their own
shipping lines, further crowding and depressing the profit margins of
existing lines.
“Industrial production and tourism are our two lungs,” Barton says of
Hong Kong’s economy. “We not only have to maintain our present employment
levels; we must also find jobs for thousands and thousands of young
people in the next few years.”
He cites one of the major discoveries of the 1961 census—that 40.8
percent of the total population of Hong Kong is under fifteen years of
age—as evidence of the coming demand for new jobs.
Accustomed to economic upheavals, Jardine’s has adapted itself to changed
conditions by investing in growth industries, and by developing new
industrial sites at Tsuen Wan, Kwun Tong and West Point. It is selling
some of its land holdings to finance a six-year modernization of the
wharf operations of the Hongkong and Kowloon Wharf & Godown Co. Its new
international ship terminal in Kowloon, costing $7 to $8 million, will
include a pier 1,200 feet long, and will have car parks, shopping areas
and a bowling alley.
Sir Michael Turner, head of the Hongkong & Shanghai Bank, emphasizes that
local industries, confronted with restrictions in their export markets,
must seek new markets for their output.
“Our land and labor costs are rising,” Sir Michael says. “But we must be
able to compete with Japan, Formosa, and ultimately, Red China. Red China
can ignore costs and flood our markets, as they did previously in shoes
and textiles.”
Sir Michael has a limited faith in the doctrine that the colony’s market
problems can be solved by diversification of its industries.
“Even diversification means that we’ll encounter resistance in the new
lines we enter.” He believes that the colony’s industries must maintain
quality and raise it where possible, rather than lowering standards to
compete with inferior products.
He says that Hong Kong has attracted investment capital from all over
Southeast Asia because of its exceptional political stability, and
because local industry was not disrupted by union work-stoppages. He
cites the traditional Chinese dislike of regulation and regimentation as
a factor inhibiting the expansion of union power.
“The shortage of land and water is still our greatest limitation,” Sir
Michael says. “Land development is very costly, and although the builder
of an apartment house may recover his costs in one year, that is not
possible in the construction of factories.”