DEPENDENCE ON EXTERNAL TRADE
4. The major impetus to this growth has been the even more rapid increase in the volume of external trade. Hong Kong is a relatively small territory of some 400 square miles, much of which is hills or islands incapable of intensive development. With a large population for its size and no natural resources other than its harbour, it is forced to rely very heavily on trade with the outside world in order to survive. The greater part of the output. of Hong Kong's industries is exported. Similarly, the greater part of the needs of its population are met by imports. This produces a very large volume of trade. In 1987 for instance, Hong Kong's total visible trade was equivalent to 206% of its GDP, compared with 15% for the United States, 16% for Japan and 43% for the United Kingdom. If invisible, or service, trade is also included the total approaches
two and a half times GDP.
5. The growth in Hong Kong's trade has been significantly greater over the years than the growth of its GDP, thus bringing about an increasing external orientation of the economy and a closer integration with the world economy. Since 1966 the volume of Hong Kong's trade has risen twelve times, making it, according to IMF statistics, now the 10th biggest trading entity in the world.
PHASES OF GROWTH
6. Over the past 40 years Hong Kong has gone through several distinct phases in the development and orientation of its economy. There have also been immense changes in the physical make up of the
territory.
There have The progress has not always been smooth.
1
been many difficult periods, sometimes brought on by developments in the world economy and sometimes by internal factors.
1.
The first phase occupied the whole of the 1950s and the early
1960s.
As stated above, in the early 1950s, Hong Kong's traditional
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