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Remarkable transformation of the economy
Hong Kong's economy has undergone a remarkable transformation in the past two decades, and there has been a rapid expansion in the services sector, the Financial Secretary, Mr Donald Tsang, told the Legislative Council today (Wednesday).
By the end of 1995, the services sector had generated over 80 per cent of the territory's Gross Domestic Product (GDP), Mr Tsang said in presenting a document on 'The Services Sector -- Support and Promotion" as part of his Budget.
He noted that even without the public sector, services still accounted for about 73 per cent of GDP.
Mr Tsang said there had also been a restructuring of the manufacturing industry, as firms moved their low value-added work out of Hong Kong and concentrated on high-value, technology-based markets.
This restructuring had given Hong Kong both the incentive and the resources to expand its role as a world-class services centre for the next century.
Under business leadership, market forces had driven this profound restructuring of the economy. What dictated the pace and direction of the transformation had been the response of business men and women to changing market conditions and the. willingness of the business community to meet new challenges and to seize new opportunities.
At the same time, the business community had successfully secured the co- operation of the workforce in moving out of lower value-added manufacturing and into service and technology-based jobs. This combination of business enterprise and workforce co-operation explained why Hong Kong had accomplished the transformation so smoothly and so rapidly.
Mr Tsang said: "The Hong Kong Government understands very well that it is not its task to dictate business decisions or to second-guess markets. The Government's role is to keep bureaucratic interference to a minimum and to provide the maximum level of support for business consistent with Hong Kong's long- established and successful free market economic philosophy.
"What this means in practice is that the Government must ensure that its policies and programmes are as business-friendly as possible and that it does nothing to hinder enterprise and everything to promote it. The Government has a good track record in its support for manufacturing. But it has paid less attention to the services sector. The Government now needs to review its approach to the services sector to ensure that the right policies and programmes are in place to facilitate its growth and development."