ENG-1984 — Page 117

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The Economy

THE Hong Kong economy recorded another year of export-led growth in 1984. Domestic exports, re-exports and imports grew by about 17 per cent, 30 per cent and 15 per cent in real terms respectively, compared with corresponding growth rates of 14 per cent, 15 per cent and 10 per cent in 1983. Coupled with a steady growth in domestic demand, the gross domestic product (GDP) grew by an estimated 9.6 per cent in real terms in 1984. There was a slowing down in the rate of inflation during the year. The employment situation also improved, as both the unemployment and underemployment rates fell.

Structure of the Economy

Because of Hong Kong's limited natural resources, it has to depend on imports for virtually all of its requirements, including food and other consumer goods, raw materials, capital goods and fuel. It must, therefore, export on a sufficient scale to generate the foreign exchange earnings to pay for these imports, and the volume of exports must rise over time if the local people are to enjoy a rising standard of living.

The externally oriented nature of the economy can be seen from the fact that in 1984 the total value of visible trade (including domestic exports, re-exports and imports) amounted to 179 per cent of the gross domestic product, Between 1975 and 1984, the average annual growth rate of domestic exports in real terms was about 11 per cent, roughly twice the growth rate of world trade. As a result, the territory of Hong Kong now ranks high in the list of the world's trading nations.

Contribution of Various Economic Sectors

The relative importance of the various economic sectors can be assessed in terms of their value-added contribution to the GDP and their shares of total employment.

Primary production (comprising agriculture and fishing, and mining and quarrying) is very limited and its contribution to the GDP is relatively insignificant.

Within secondary production (comprising manufacturing, electricity, gas and water, and construction), manufacturing still accounts for the largest share of the GDP as well as of employment. This is despite a decline in its relative contribution to the GDP, from 28 per cent in 1971 to about 23 per cent in 1981 and to about 22 per cent in 1983. The relative importance of the construction sector increased from about six per cent in 1971 to about eight per cent in 1981, but decreased to about six per cent in 1983.

The relative importance of the tertiary services sectors (comprising wholesale and retail trades and restaurants and hotels; transport, storage and communications; the financial and related business services sector; and the community, social and personal services sector) increased slightly between 1971 and 1983: their total contribution to the GDP was 63 per cent in 1971, and 64 per cent in 1981 and 1983. However, the relative contribution of the