“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.