THE ECONOMY
foreign exchange market in terms of turnover. Its stock market is the second largest in Asia in terms of market capitalisation. All these attest to the fact that the territory has firmly established itself as a major international trade and financial centre. According to the World Competitiveness Report 1994, published by the International Institute for Management Development and the World Economic Forum, Hong Kong was ranked the fourth most competitive economy in the world, after the United States of America, Singapore and Japan. According to a survey commissioned by Fortune magazine, Hong Kong was the most attractive city in the world in which to do business.
Over the past two decades, the Hong Kong economy has more than quadrupled in size. With its GDP growing at an average annual rate of about seven per cent in real terms, Hong Kong has out-performed the Organisation for Economic Co-operation and Development (OECD) countries and has been growing more than twice as fast as the world economy. Per capita GDP, after discounting inflation, has almost tripled. Its average annual growth rate was about five per cent in real terms. Valued at US$21,800 in 1994, Hong Kong's per capita GDP surpassed that of the United Kingdom, Canada and Australia, and was next only to Japan and Brunei in Asia. Benefiting from this economic performance, the local workforce has been able to enjoy a continuous rise in income, as well as full employment since 1986.
As a small and open economy, Hong Kong's economic success owes a great deal to the remarkable performance of the external trade sector. Trade in goods expanded more than 37-fold over the past two decades. Trade in services also rose rapidly, by more than 24 times in the same period. As an illustration of the highly externally-oriented nature of the Hong Kong economy, the total value of visible trade (comprising re-exports, domestic exports and imports) reached $2,421 billion in 1994, representing 238 per cent of the GDP. The corresponding ratios were 124 per cent in 1966, 148 per cent in 1980 and 221 per cent in 1990. Including also the value of exports and imports of services, the ratio was 276 per cent in 1994. The corresponding ratios in 1966, 1980 and 1990 were 158 per cent, 181 per cent and 260 per cent, respectively.
Contributions of the Various Economic Sectors
The relative importance of the various economic sectors can be assessed in terms of their contributions to the GDP and to total employment.
Primary production (comprising agriculture and fisheries, mining and quarrying) is very small in terms of its contributions to both the GDP and employment.
Within secondary production (comprising manufacturing, construction and the supply of electricity, gas and water), the manufacturing sector still accounts for the largest share in terms of both the GDP and employment. However, reflecting the progressive relocation of manufacturing processes across the border into China and the continued expansion of the services sector, the contribution of the manufacturing sector to the GDP declined steadily from 31 per cent in 1970, to 21 per cent in 1982. It then increased to 23 per cent in 1983 and 24 per cent in 1984, before stabilising at around 22 per cent during the period from 1985 to 1987. It fell again, to 19 per cent in 1989 and further to 11 per cent in 1993. The share of the construction sector in the GDP increased from four per cent in 1970 to eight per cent in 1981. It then fell back to seven per cent in 1982 and six per cent in 1983, before settling at around five per cent during the period from 1984 to 1993. The combined share of electricity, gas and water supply, meanwhile, fell from two per cent in 1970 to slightly more than one
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