2

<

Given a sustained demand

for manpower against a relatively

limited supply, earnings in all major sectors continues to show significant increases.

5.

Consumer price

inflation showed a significant moderation in the first eight months of 1992, before picking

up slightly towards the end of the year. Faster increases were observed notably in housing rentals and in the charges

for local services. Nevertheless, the year-on-year rate of

increase in the Consumer Price Index (A) stayed at a single

digit level for most of 1992. The average increase for the year as a whole was [9.5] per cent. The corresponding rate

of increase in 1991 was 12 per cent.

6.

1992.

Hong Kong is undergoing rapid structural change towards a more service-oriented economy. The contribution of

the service sectors as a whole to the GDP rose from 64 per

cent in 1985 to [69] per cent in 1991; their share in

employment increased from 55 per

cent in 1986 to [63] per

cent in

This change was made possible, in large measure, by the availability of outward processing facilities in China. By relocating the more labour-intensive production processes across the border, workers in Hong Kong are able to

concentrate

value-added and more

skill-intensive tasks locally. It has also facilitated the

release of a substantial number of local workers from the

manufacturing sector to the service sectors.

with

on

the

higher

the greater demand for services to

expanded production and export base.

This is in line

support a much

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