42 The Economy
The corresponding figures for Hong Kong's stock of outward direct investment. were likewise substantial, at $7,889 billion and 488 per cent of GDP, much larger than those of many other economies in Asia. As a major financial centre in the region with huge cross-territory fund flows, Hong Kong's external financial assets and liabilities were also substantial, at $21,194 billion and $17,421 billion respectively at the end of 2007. The corresponding ratios to GDP in that year were 1 312 per cent and 1 079 per cent. Reflecting Hong Kong's sound international investment position, its net external assets rose to $3,774 billion at the end of 2007, equivalent to 234 per cent of GDP.
The Gross National Product (GNP), comprising GDP and net external factor income flows, stood at $1,760 billion in 2008. This was higher than the corresponding GDP by 4.9 per cent. The difference represented a net inflow of external factor income. In gross terms, inflows and outflows of external factor income remained substantial in 2008, at $941 billion and $859 billion respectively, equivalent to 56 per cent and 51 per cent of GDP respectively. This was related to the huge volume of both inward and outward investment in Hong Kong.
Contributions of the Various Economic Sectors
Primary production (including agriculture, fisheries, mining and quarrying) has been insignificant in Hong Kong, in terms of both value-added contribution to GDP and share in total employment. This reflects Hong Kong's position as a predominantly urban economy.
Secondary production (comprising manufacturing, construction, and supply of electricity, gas and water), which contributed greatly to the value-added component of the total economy in the early 1980s, has since diminished in importance. Within this broad sector, the value-added contribution from manufacturing shrank from 21 per cent in 1987 to 6 per cent in 1997 and to only 3 per cent in 2007 as a result of the relocation of the more labour-intensive production processes to the Mainland. The construction sector's contribution to GDP stayed at around 5 per cent between 1987 and 2000, before edging down in the following years to 3 per cent in 2007. The supply of electricity, gas and water held relatively stable, with a share of around 2-3 per cent of GDP over the past two decades.
Hong Kong's economy has become increasingly service-oriented since the 1980s. The Mainland's open-door policy and economic reform have not only provided an enormous production hinterland and market outlet for Hong Kong's manufacturers, but also created abundant business opportunities for a wide range of service providers. Hong Kong has continued to re-orient itself towards service activities, prompted by the changing regional and global economic environment and also by closer integration with the Mainland. In particular, while the thriving Mainland economy has provided ample business opportunities for Hong Kong's services sector, the availability of cheaper land and labour on the Mainland side giving rise to improved competitiveness and productivity there has also propelled Hong Kong's move up the value chain.
As a result, the share of the tertiary sector (comprising the wholesale, retail and import/export trades; restaurants and hotels; transport, storage and communications;