ENG-1998 — Page 81

THE ECONOMY

services (23 per cent); financing, insurance, real estate and business services (13 per cent); and transport, storage and communications (12 per cent).

Chart 5

Employment by major service sector

Wholesale, retail,

import/export trades,

restaurants and

hotels

20.0%

1980

Others 51.6%

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

31,7%

1998*

Others

20.1%

Transport, storage and

communications

7.3%

Transport, storage and

Financing,

communications

insurance,

11.9%

real estate and

business

services

Community, social and personal services 16.5%

4.6%

Financing, insurance,

real estate and business services 13.4%

Community, social and personal services 22.9%

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.

* Average of Q1 to Q3 1998.

The Manufacturing Sector

Manufacturing firms in Hong Kong are renowned for their versatility. The existence of many small establishments, connected under an extensive local sub-contracting network, has greatly facilitated producers to cope with frequent changes in demand in the overseas markets. Furthermore, the increasing use of outward processing facilities. in the Mainland has enabled Hong Kong's productive capacity to expand by multiples even amid the capacity constraint locally, and hence helped maintain the price competitiveness of Hong Kong's products. A predominant proportion of Hong Kong's manufacturing output is destined for export.

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, mainly on account of the sustained initiative and dedicated promotion efforts of both local manufacturers and exporters. To maintain competitiveness, product quality has also been continuously upgraded over the years.

Thus the local manufacturing sector has become increasingly diversified. Apart from the toys and electronics industries, the textiles and clothing industries remain prominent, notwithstanding their decline in relative importance. Other important industries include printing and publishing, machinery and equipment, fabricated metal products, plastic products, watches and clocks and jewellery. Those manufacturing operations staying in Hong Kong are generally more knowledge-based

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