TNAG-2047-FCO40-2917-Visits-by-staff-of-the-Department-of-Trade-and-Industry-to-H-1990 — Page 123

BUSAAF

HONG KONG BACKGROUND BRIEF

HONG KONG : ECONOMIC

1.

Much of Hong Kong is unproductive mountainland. About 16%, including areas reclaimed from the sea, is used for residential and industrial development. Only 9.4% of the land is farmed, producing vegetables, fruit, flowers, freshwater fish, pigs and poultry. There is a considerable fishing fleet of 5,000 boats, meeting over 90% of local demand for fish. Less than 3% of the population engage in farming or fishing.

2.

Hong Kong's principal natural asset is its sheltered harbour,

the only developed deep water port on the China coast. From the establishment of Hong Kong as a centre for Britain's Far East trade

in 1841 up to about 1950, trade and commerce was the main economic

activity. Then, when the Korean War 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 international financial and tourist

centre.

3. Hong Kong's economy is based on commitment to market mechanisms

and free enterprise. Average growth over the past twenty years has

been around 8%. Per capita income in 1989 was about US$10,900. This is the second highest in Asia, after Japan, and compares very favourably with many industrialised countries.