ENG-1997 — Page 84

THE ECONOMY

In 1995, the Gross National Product (GNP), comprising GDP and net external factor income flows, amounted to $1,092 billion at current prices. This was 1.3 per cent higher than Hong Kong's GDP in the same year. Both the inflows and outflows of external factor income were very substantial, estimated to be $387 billion and $373 billion respectively, amounting to over two-thirds of GNP. This reflects the significant role of Hong Kong as an international financial centre.

Contributions of the Various Economic Sectors

The relative importance of the various economic sectors can be assessed in terms of their contributions to the GDP and to total employment. In the absence of natural resources, the contribution of primary production (agriculture and fisheries, mining and quarrying) to GDP and employment is negligible in Hong Kong.

Chart 2

Gross Domestic Product by broad economic sector

1980

1996

Secondary production

Secondary production 31.6%

15.5%

Primary production 1.0%

Primary production 0.2%

*• < ❤

Tertiary production 67.5%

Tertiary production 84.4%

Over the past 15 years, the tertiary services sector has become increasingly important in terms of contribution to GDP.

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Within secondary production (comprising manufacturing; construction; and the supply of electricity, gas and water), the contribution of the manufacturing sector to GDP declined steadily along with the continued expansion of the service sectors and the on-going relocation of manufacturing processes to the Mainland since the mid- 1980s, from 24 per cent in 1980 to 18 per cent in 1990, and further to 7 per cent in 1996. On the other hand, the share of the construction sector in GDP, having fallen from 7 per cent in 1980 to around 5 per cent in 1985, has stayed at around 5 per cent since then. The combined share of the supply of electricity, gas and water, at 2 per cent in 1996, was broadly similar to the average level of 3 per cent recorded over the past 10 years.

The open-door policy and economic reforms in the Mainland have not only provided a huge production hinterland for local manufacturers, but have also created an abundance of business opportunities for a wide range of service activities in Hong Kong. These include freight transport, telecommunications, banking, real estate