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Hong Kong was soon back in business as the world's most famous free port, where German cameras cost less than they do in Germany, Swiss watches less than in Switzerland. British merchants quickly rebuilt their trade networks throughout the Orient. Between 1946 and 1948, trade doubled. By 1950, it doubled again. Population grew nearly as fast. Refugees fleeing the Red conquest of China choked Hong Kong with 3,000,000 people. Britain, largely in Hong Kong's interest, recognized Red China, and at first the bargain seemed to pay off, since by 1951, exports to the Communist mainland rose to $280 million annually.
But with the entry of Red Chinese "volunteers" into the Korean war, the bubble burst. The United Nations embargo on the export of strategic commodities to the mainland was scrupulously enforced in Hong Kong. Deprived of trade with China, the colony seemed ready to sink into obscurity.
Transportation. Hong Kong was saved by its Chinese refugees. Most of them were desperately poor, but among them were Shanghai businessmen and industrialists. Overseas Chinese, frightened by the rising nationalism of the newly independent countries of Southeast Asia, brought their families and their money to the safety of Hong Kong. Soon they were investing in everything from laundries to new hotels. They set up factories first in cellars, then in empty stores, finally in new-built plants. In ten years, they transformed Hong Kong from simply a trading center and transshipment depot into the fastest-growing industrial city in the Far East. Ten years ago, 90% of Hong Kong's income was from the reexport of goods produced somewhere else—in Britain, Germany, Japan, India, Red China. This year, 75% of its exports are goods manufactured by the colony's humming factories and enterprises. The U.S. has become Hong Kong's major customer, taking 18% of its exports, followed by Britain. Exports to Red China have dwindled to an inconsequential 3%.
Chinese Fashion. The transformation was confused, typically Chinese, and as free as enterprise can get. Typical was the story of one Adrian R. Wu, who fled from Shanghai with his wife in 1949. Wu speculated briefly in gold and put his profit into a toy factory. It failed. Undaunted, Wu borrowed money from an uncle and started another factory making plastic buttons, which became a modest success and was sold to an eager buyer. In all his operations, Wu maintains a series of loose partnerships with other Chinese businessmen, who in turn have partners of their own. Thus A, B and C deal in textiles; A, D and E are in toys; B, F and G make flashlights; C, D, F, H, and an unknown American with U.S. outlets set up an underwear factory. When Wu heard that Italian-made plastic flowers were the rage in New York at $2 to $4 each, he got together some "partners," obtained a sample flower from a U.S. importer and, with a borrowed mold and a truckload of polyethylene, began making similar flowers which now sell briskly for 50¢ to 75¢ in U.S. supermarkets.
Expiring Lease. The British still run Hong Kong and still control its banks and commercial enterprise. But the industrial millionaires are seldom British. Some of the top entrepreneurs: