44
THE ECONOMY
an
The open door policy and economic reform in the Mainland have not only provided enormous production hinterland and market outlet for Hong Kong's manufacturers, but have also created abundant business opportunities for a wide range of service activities. These activities include specifically freight and passenger transport, travel and tourism, telecommunications, banking, insurance, real estate, and professional services such as financial, legal and accounting services. In consequence, the Hong Kong economy has become increasingly service-oriented since the 1980s.
Reflecting this, the share of the tertiary services sector (comprising the wholesale, retail and import/export trades, restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; community, social and personal services; and ownership of premises) in GDP went up visibly, from 67 per cent in 1980 to 74 per cent in 1990 and further to 86 per cent in 2000.
The profound change in the economic structure was also manifested by a shift in the sectoral composition of employment. Over the past two decades, the share of the services sector in total employment followed a continuous uptrend, rising from 50 per cent in 1981 to 66 per cent in 1991 and further to 83 per cent in the first three quarters of 2001. Yet the corresponding share for the manufacturing sector kept on declining markedly, from 39 per cent in 1981 to 25 per cent in 1991 and further to only 7 per cent in the first three quarters of 2001 (Chart 3).
Chart 3
Employment by broad economic sector
Secondary production 48.5%
1981
2001 **
Secondary production
16.2%
Primary production 1.3%
Primary production 0.3%
Tertiary production 50.2%
Tertiary production 83.4%
Upon ongoing relocation of the less skill-intensive and lower value-added manufacturing processes to the Mainland, and with the strong expansion in service activities in Hong Kong, the tertiary services sector has overtaken the secondary sector to become the largest employer in the economy since 1981.
* Average of Q1 to Q3 2001.