“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. He had made the building of boats his lifetime hobby, and was frequently 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.