INDUSTRY AND TRADE
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SLACKENING demand in some of Hong Kong's major markets, notably the United States, slowed growth in domestic exports (up three per cent in 1989), but Hong Kong's rapid development as a service and sourcing centre for the region was evidenced by a 25.8 per cent growth in re-exports.
The manufacturing sector still has a vital role to play in Hong Kong's growth. The value of manufactured exports rose by three per cent to $224,104 million during the year, dem- onstrating that Hong Kong's economy remains basically sound and that its manufactured products remain as competitive as ever in major overseas markets.
The ingredients of Hong Kong's success as a leading manufacturing centre are well known: a versatile and industrious workforce; an aggressive and innovative managerial class; a simple tax structure and low taxation rate; efficient transport facilities; a fine har- bour and good international communications, and the government's firm commitment to free trade and free enterprise.
In 1989, manufacturing remained the largest economic sector in terms of employment, employing 811 800 persons or 30 per cent of total employment. It also accounted for 20.4 per cent of the gross domestic product.
It is estimated that up to 90 per cent of Hong Kong's manufacturing output is eventually exported. The lack of natural resources and the limited supply of land for industrial use have generally constrained diversification into capital and land-intensive industries. Light manufacturing industries, producing mainly consumer goods, predominate. Textiles, clothing, electronics, watches and clocks, and plastics are the major industries. These industries together accounted for 66 per cent of Hong Kong's total manufacturing employment and 71 per cent of total domestic exports in 1989.
Clothing
Hong Kong has been either the world's largest or second largest exporter of clothing since 1973, and the clothing industry is the largest export-earner in the manufacturing sector. Domestic exports of clothing in 1989 amounted to $71,874 million, or 32 per cent of Hong Kong's total domestic exports. Clothing is also the largest manufacturing industry of Hong Kong, employing 274 379 persons or 34 per cent of total manufacturing employment.
Clothing exports to many developed countries are subject to quota restraint. The cloth- ing industry has responded by moving up-market to increase the value-added content of its products and explore new markets. Computer-aided design and computer-aided manu- facturing technology in pattern grading, marker making and automatic cutting are increasingly being used in the clothing industry, resulting in higher productivity.