 Private mills continued to try to grow, but major obstacles included high production costs due to inflation and scarcity of foreign exchange with which to buy raw cotton, machinery, and supplies.The war had wreaked havoc on the land, and the textile machine tool industry which had been prospering was largely lost.Finally, as the Chinese Communist Party rose to power, many mill owners packed their bags and moved their operations to Hong Kong to survive, allowing the next stage of development to take place in Hong Kong.