ENG-2001 — Page 83

THE ECONOMY

GDP by 2.9 per cent, owing to sustained net inflow of external factor income. In gross terms, inflows and outflows of external factor income continued to be substantial in 2001, at $374 billion and $338 billion respectively, or 30 per cent and 27 per cent of GDP. This was largely related to the huge volume of both inward and outward investment in Hong Kong.

Contributions of the Various Economic Sectors

The relative importance of various economic sectors can be assessed in terms of their respective value-added contribution to GDP and share in total employment. By both measures, primary production (including agriculture, fisheries, mining and quarrying) is insignificant in Hong Kong, as its development is much constrained by the limited endowment of natural resource and the relative land scarcity.

Secondary production (comprising manufacturing, construction, and supply of electricity, gas and water), which constituted a significant contributor to GDP up to the early 1980s, has dwindled in relative importance since then. Within this broad sector, the value-added contribution from manufacturing shrank noticeably, from 24 per cent in 1980 to 18 per cent in 1990 and even more to only 6 per cent in 2000, consequential to the ongoing relocation of the more labour-intensive production processes to the Mainland. Also relevant was the concurrent rapid expansion in the services sector, along with an upsurge in re-export and transhipment trade, tourism and financial services, as well as sustained growth in domestic demand. As to the construction sector, its contribution to GDP shrank from 7 per cent in 1980 to 5 per cent in 1990, and stayed at roughly the same level thereafter. The corresponding share for supply of electricity, gas and water nevertheless showed a gradual pick-up, from 1 per cent in 1980 to 2 per cent in 1990 and further to 3 per cent in 2000 (Chart 2).

Chart 2

Gross Domestic Product by broad economic sector

1980

2000

Secondary production 31.6%

Secondary production 14.3%

Primary production 1.0%

Primary production 0.1%

Tertiary production 67.5%

Tertiary production 85.6%

Reflecting a profound shift in economic structure, the share of the tertiary services sector in GDP has been on a sustained rise over the past two decades, in parallel with a continued shrinkage in the share of the secondary sector.

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