ENG-1996 — Page 85

THE ECONOMY

Employment by major service sector

Chart 5

1980

Others 51.6%

Wholesale, retail,

import/export trades,

restaurants and

hotels

20.0%

Transport, storage and

commu-

Wholesale, retail, import/export trades, restaurants and hotels 34.7%

1996

Others 21.3%

Transport. storage and

Financing, insurance,

real estate and business services

Community, social and personal services 21.4%

nication

7.3%

Financing. insurance,

commu- nication

real estate and

business

services

Community, social and personal services 16.5%

11.0%

4.6%

11.6%

Over the years, the distributive and catering trades, community, social and personal services, as well as financing, insurance, real estate and business services have become important employers in the services sector.

The Manufacturing Sector

Hong Kong's manufacturing firms are well known for their versatility. An extensive local sub-contracting system, comprising a large number of small establishments, has greatly facilitated production in coping with the frequent changes in demand in the overseas markets. Moreover, the increasing use of outward processing facilities in China has enhanced the flexibility of production capacity and helped to maintain the price competitiveness of Hong Kong's products. A predominant proportion of Hong Kong's manufacturing output is for export.

Over the years, the pressure of protectionism in several major markets and growing competition from other economies in East Asia have led to even greater diversification in both products and markets. This is attributable to the initiative of local manufacturers and exporters as well as their own dedicated promotion effort. To maintain competitiveness, there has also been a continuous upgrading of product quality.

In consequence, many industries have emerged and grown, the most notable one being electronics. The textiles and clothing industries remain prominent, notwithstanding their continuous declines in relative importance. Other important industries include printing and publishing, machinery and equipment, fabricated metal products, plastic products, plastic watches and clocks and jewellery.

Of particular note is the significant improvement in labour productivity in the manufacturing sector. During the period 1980 to 1995, the value of net output by the manufacturing sector grew at an average annual growth rate of 7 per cent, while

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