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brought a slump in trade with China, it became necessary to
develop other sources of income, particularly as the population had expanded rapidly with the influx of immigrants from China at
the time of the Communist take-over. Hong Kong therefore turned to manufacturing, starting with textiles and clothing (which remain the dominant industries), but diversifying later into many other products, including plastics, electrical and
electronic goods, scientific instruments, watches and photographic and optical equipment. The entrepôt trade with China has re-emerged as a significant proportion of Hong Kong's trade in the last few years, and service industries have
expanded rapidly as a consequence of rapidly growing domestic incomes and Hong Kong's development as an important financial and tourist centre in the region.
2.3
The management of Hong Kong's economy is based on commitment to market mechanisms and free enterprise.
In 1981,
the Gross Domestic Product was an estimated HK$135,346 million (approx. £12,590 million at 1981 rate of exchange) and per capita GDP was HK$26,260 (approx. £2,440). In the ten years
ending 1981 the growth rate of the GDP in real terms was 10.1%.
The growth rate of real income per capita was affected by the
high growth rate of population in 1978-80. Nevertheless, as a
result of a growth rate of 7.4% in the 1970's, real income per capita by 1981 was more than twice that in 1971, (giving Hong Kong the highest per capita income in Asia, other than Japan).
Recently, the world recession has meant a reduction in anticipated growth, which is now projected at 4% p.a. for 1982-1983. Inflation in mid-1982 was about 11%.
2.4 Hong Kong is almost totally lacking in natural resources
and, relative to its population, is very short of usable land. The manufacturing sector is therefore completely dependent on imported raw materials, semi-manufactures and capital goods. Other sectors of the economy are almost equally dependent on imported inputs. The bulk of Hong Kong's requirements of foodstuffs and consumer goods is also imported. Thus the total
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