ENG-1999 — Page 71

THE ECONOMY

Contributions of the Various Economic Sectors

The relative importance of the various economic sectors can be gauged by their respective contributions to GDP and total employment. Owing to the absence of natural resources, primary production (agriculture and fisheries, mining and quarrying) is very small in terms of its contributions to both GDP and employment in Hong Kong.

Chart 2:

Gross Domestic Product by broad economic sector

Secondary production 31.6%

1980

1998

Primary production 1.0%

Primary production

Secondary production 0.2% 15.1%

Tertiary production 67.5%

Tertiary production 84.7%

Over the years, the tertiary services sector has witnessed significant growth in terms of contribution to GDP.

Within secondary production (comprising manufacturing; construction; and supply of electricity, gas and water), the contribution of the manufacturing sector to GDP fell significantly over the past two decades, from 24 per cent in 1980 to 18 per cent in 1990, and further to only 6 per cent in 1998. This was mainly due to the combined influence of a fast expansion in the services sector in Hong Kong and the ongoing relocation of the more labour-intensive manufacturing processes to the Mainland. On the other hand, the share of the construction sector in GDP, having declined from 7 per cent in 1980 to 5 per cent in 1990, rose back to 6 per cent in 1998. As to the supply of electricity, gas and water, the respective share in 1998, at 3 per cent, was broadly similar to the average of 2-3 per cent recorded over the past 10 years.

The open-door policy and economic reforms in the Mainland have not only provided an enormous production hinterland and market outlet for local manufacturers, but have also generated massive business opportunities for development of a wide range of service activities in Hong Kong. These service activities specifically include freight transport, telecommunications, banking, real estate development, and professional services such as legal, accounting and insurance services. In consequence, the economy has become increasingly service-oriented since the mid-1980s.

45