COMMERCE AND INDUSTRY
efficient and flexible sub-contracting network. This arrangement has enabled the manufacturing sector to respond swiftly to market changes.
The Services Sector
The services sector grew significantly in the past two decades. Its share in Hong Kong's Gross Domestic Product (GDP) rose from 67 per cent in 1984 to 85.6 per cent in 2000. In 2001, the sector employed 1 997 600 persons (87.4 per cent of the total private sector employees). Hong Kong has become one of the most service-oriented economies in the world. Much of this growth was fuelled by the demand for producer services by Hong Kong's globalised production network and the trend to source. goods and services globally.
Like manufacturing, the services sector is dominated by SMEs. In 2001, 98.3 per cent of Hong Kong's 275 012 service establishments were SMEs (employing fewer than 50 persons). Together, they employed 1.22 million persons (60.9 per cent of the total service employment in the private sector).
In 2000, Hong Kong's total services trade amounted to US$65.1 billion, making it the world's 11th largest trading entity in terms of value of services trade. In the same year, Hong Kong exported US$ 42.2 billion worth of services, bearing a ratio of 25.9 per cent of GDP. Hong Kong ranked second after Japan in the region in term of absolute value of exports of services. In the global league table of exports of services, Hong Kong ranked ninth in 2000.
Hong Kong's exports of services comprise mainly transportation, trade-related and travel services, which accounted for 36 per cent, 30 per cent and 18 per cent respectively of the total value in 2000. The corresponding share for exports of financial services was 9 per cent, and that for exports of insurance and other services was 7 per cent.
In addition to being a net exporter of services in overall terms, analysed by component of services trade, in 2000 Hong Kong recorded a surplus in trade-related services (US$10.9 billion), transportation services (US$10.5 billion) and financial services (US$2.4 billion).
External Investment
Hong Kong's attractiveness as a place to do business is reflected by two major indicators, namely the inflow of foreign direct investment (FDI), and the number of foreign-owned regional headquarters and regional offices.
In 2000, Hong Kong was the top destination in Asia for FDI with inflow totalling US$61.9 billion, which represented a 152 per cent increase over the 1999 level of US$24.6 billion.
A Census and Statistics Department survey shows that Hong Kong had 9 207 enterprise groups' with inward direct investment at the end of 2000, comprising 486 in the manufacturing sector and 8 721 in the non-manufacturing sectors. The market value of the stock of inward direct investments amounted to $3,551.3 billion. Chart 3 shows the major economic activity of these enterprise groups while Chart 4 shows source countries/territories of the inward direct investments. Regarding employment,
Note: an enterprise group may consist of a parent company, its subsidiaries, associates and branches.
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