ENG-2000 — Page 81

THE ECONOMY

Between 1990 and 2000, labour productivity in the local manufacturing sector, as measured by output per person engaged, went up by an average of around 10 per cent per annum. The improvement occurred almost throughout the entire period, except for 1999 when there was a contraction in manufacturing output signifying reduced capacity utilisation, as well as shrinkage in investment in industrial machinery along with the economic downturn.

Chart 6

Output per person engaged in the local manufacturing sector (March 1991-100)

Index

300

250

200

150

100

50

0

1988

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Labour productivity in the local manufacturing sector has remained generally on an uptrend over the past decade.

*

Average of Q1 to Q3 2000.

The United States and the Mainland were the two largest markets for Hong Kong's domestic exports, each accounting for 30 per cent of the total value in 2000. The other major markets comprised the United Kingdom (with a share of 6 per cent), Germany (5 per cent), Japan (3 per cent) and Taiwan (also 3 per cent). In the more recent years, new markets were explored and developed for Hong Kong's exports, including markets in the Middle East, Eastern Europe, Latin America and Africa.

Increasing economic links between the HKSAR and the Mainland

Since China adopted economic reform and an open door policy in 1978, economic links between Hong Kong and the Mainland have gone from strength to strength. This has brought about substantial economic benefits for both places.

Between 1978 and 2000, visible trade between Hong Kong and the Mainland grew significantly, by an average of 24 per cent per annum in value terms. Yet reflecting the increasing trend of direct shipment of goods into and out of the Mainland and also the enhanced port facilities and simplified customs procedures there, the growth rate of two-way trade slowed down in the more recent periods, to an annual average of 5 per cent over 1995-2000, from that of 20 per cent over 1990-1995. This notwithstanding, the Mainland was still Hong Kong's largest trading partner,

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