ENG-1997 — Page 85

THE ECONOMY

development, and professional services such as legal, accounting and insurance services. Hence, since the mid-1980s, the Hong Kong economy has become increasingly oriented towards services.

Reflecting this, the significance of the tertiary service sector as a whole (comprising the wholesale, retail and import/export trades, restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; community, social and personal services; and ownership of premises) in terms of its contribution to GDP rose steadily, from around 67 per cent in 1980 to 70 per cent in 1985 and 74 per cent in 1990, and further to 84 per cent in 1996.

Chart 3

Employment by broad economic sector

1980

1997*

Secondary production 50.1%

Secondary production 20.4%

Primary production 1.5%

Primary production 0.5%

Tertiary production 48.4%

Tertiary production 79.1%

With the on-going relocation of lower value-added and less skill-intensive manufacturing processes to the Mainland and steady expansion of service sector activities in Hong Kong, the tertiary services sector has overtaken the secondary production section to become the largest employer in the economy. *Average of Q1 to Q3 1997.

Employment in the economy also shifted towards services over time. The tertiary service sector's share as a whole in total employment rose from 48 per cent in 1980 to 54 per cent in 1985, and further to about 79 per cent in 1997. On the other hand, the manufacturing sector's share in total employment was on a distinct downtrend, dropping from 42 per cent in 1980 to 36 per cent in 1985, and further to about 10 cent in 1997.

The Service Sectors

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Along with the structural change in the economy, the service sector has flourished and diversified in types of activities. The growth and development in finance and business services, including banking, insurance, real estate, and a wide range of other professional services has been particularly rapid.

Between 1987 and 1997, exports of services in real terms grew by an average of 6 per cent per annum, while that of imports of services increased by 8 per cent. The major components of Hong Kong's trade in services are civil aviation, shipping, travel and tourism, trade-related services, and various financial and banking services. The shares of transportation services in total exports and total imports of services were 35 per cent and 23 per cent respectively in 1996. The corresponding shares for travel and tourism were 29 per cent and 53 per cent. Trade-related services including

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