Chart 1
Index
350
300
250
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THE ECONOMY
Gross Domestic Product (1978 = 100)
GDP
Per capita GDP
1978 1980 1982 1984 1986 1988
1990 1992 1994 1996 1998
Over the past two decades, the Hong Kong economy has been expanding rapidly, with GDP growing by 6% per annum and per capita GDP by 4% per annum in real terms.
Trade in goods and services expanded by about 11 times and four times respectively over the past two decades. Reflecting the highly externally-oriented nature of the Hong Kong economy, the total value of visible trade (comprising re-exports, domestic exports and imports) amounted to $2,780 billion in 1998, representing 216 per cent of the GDP. This compared with the corresponding ratios of 143 per cent in 1970, 148 per cent in 1980, and 221 per cent in 1990. If the value of exports and imports of services is also taken into account, the ratio is even higher, at 250 per cent in 1998, as compared to 181 per cent in 1970, 181 per cent in 1980, and 260 per cent in 1990.
External investment has played an important role in Hong Kong's economic development. The total stock of inward direct investments in Hong Kong reached $732.4 billion at end-1997, representing a significant increase of 17 per cent over end- 1996. Of this, more than 90 per cent of the direct investment went to the non- manufacturing sectors. Analysed by major source, the UK remained the largest investor in Hong Kong, with a share of 25 per cent in the overall stock of inward direct investment at end-1997, followed by the Mainland (19 per cent), the USA (18 per cent), and Japan (13 per cent).
The Gross National Product (GNP), comprising GDP and net external factor income flows, rose markedly by 13.4 per cent in value terms to $1,351.6 billion in 1997. This was somewhat faster than the 12.8 per cent in value terms growth in GDP, due to a net factor income inflow to Hong Kong equivalent to about 0.6 per cent of GDP in that year. Reflecting the high degree of external orientation of the Hong Kong economy, both inflows and outflows of external factor income were very
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