NOT long after I joined the Commerce and Industry Department in 1954, I had the task of developing the official certification of origin system. Exports were certified as being of Hong Kong origin with export markets levying duty rates which were generally lower than those applied to Chinese origin goods.
Many countries applied restrictions against Hong Kong and often individual ones would demand special certification from the Hong Kong Government amounting to discrimination against the territory's products. Legislation was enacted to back all the various forms of origin documentation and later, textile quota control documents, to safeguard our rapidly expanding, export-orientated industrial sector.
Part of the reason for the doubts often expressed by countries about the origin of the products was that Hong Kong was a free port with virtually no restrictions on imports and exports including re-exports. There was, predictably and reasonably, a feeling foreign goods, and particularly those from China, could be re-marked, re-packaged and re-exported as being of Hong Kong origin. And at that time, non-government agencies issuing certificates of origin were not members of a system whereby the Hong Kong Government undersigned their authenticity.
The United States, rapidly becoming our largest export market, applied rigid certification controls against China at the outbreak of the Korean War. It had an active office in Hong Kong to ensure compliance with the very strict, and sometimes very foolish, prohibition on the use of Chinese raw materials and components in Hong Kong-produced goods.
My department was obliged to operate a special form of certification for a wide range of products destined for the US market.
I could write a volume about the constant struggle we had to try to ensure the US special requirements were not abused. We did our best but quite often our best was not good enough. There were many occasions when Chinese raw materials were in fact used. Local manufacturers had no alternative if they wished to do business. There was never a thought the barrier could not be overcome. It was simply a question of how.
Even today, I can remember some of these interesting dilemmas for some of our determined manufacturers. For example, Chinese hair was essential for the production of wigs for the US market. Our wig industry rapidly expanded and at one time was exporting wigs worth several hundred million dollars a year, employing nearly 40,000 workers. During our investigations, we discovered Chinese hair was exported to Southeast Asian countries and re-exported to Hong Kong. The Chinese hair thus became Southeast Asian hair and the wig industry flourished.