ABSTRACT
This chapter examines the conditions of industrial development in the 1980s, and investigates the structural and institutional factors underlying Hong Kong's failure to upgrade the technology of industrial production, and the continuation of labor-intensive production. It focuses on two issues: first, on the character of Hong Kong's industrial economy and the way local small factories respond to changes in the business environment, and second, on the formation of the non-interventionist colonial state in industrial development and its implications for Hong Kong's industrial restructuring process. The chapter investigates the formation of the non-interventionist state and its role in industrial development. The influence of the industrialists on production activities besides textiles is more limited than often supposed. Also, though the British merchants and their Commonwealth connections were pertinent to developing markets for local exports in the early 1950s, their role became less significant as the USA emerged as the major importer of Hong Kong's garment products.
