ENG-2010 — Page 88

46 The Economy

The corresponding figures for Hong Kong's stock of outward direct investment were likewise huge, at $7,374 billion and 422 per cent of GDP. As an international financial centre with huge cross-territory fund flows, Hong Kong's external financial assets and liabilities were also substantial, at $22,431 billion and $17,037 billion respectively at the end of 2010. The corresponding ratios to GDP in that year were 1 283 per cent and 975 per cent. Reflecting Hong Kong's sound international investment position, its net external assets amounted to $5,394 billion at the end of 2010, equivalent to 309 per cent of GDP.

The Gross National Product (GNP), comprising GDP and net external factor income flows, stood at $1,784.7 billion in 2010. This was higher than the corresponding GDP by 2 per cent. The difference represented a net inflow of external factor income. In gross terms, inflows and outflows of external factor income remained substantial in 2010, at $905.4 billion and $868.9 billion respectively, equivalent to 52 per cent and 50 per cent of GDP respectively. This was related to the huge volumes of inward and outward investment in Hong Kong.

Contributions of the Various Economic Sectors

Primary production (including agriculture, fisheries, mining and quarrying) is insignificant in Hong Kong in terms of both value-added contribution to GDP and share in total employment, as the city is a predominantly urban economy.

Secondary production (comprising manufacturing, construction, and supply of electricity, gas and water), which contributed greatly to the value-added component of the total economy in the early 1980s, has since diminished in relative importance. Within this broad sector, the value-added contribution from manufacturing shrank from 19 per cent in 1989 to 5 per cent in 1999 and to only 2 per cent in 2009. The construction sector's contribution to GDP stayed at around 5 per cent between 1989 and 2000, before edging down in the following years to 3 per cent in 2009. The supply of electricity, gas and water held relatively stable, with a share of around 2-3 per cent of GDP over the past two decades.

Hong Kong's economy has become increasingly service-oriented since the 1980s. The Mainland's open-door policy and economic reforms have not only provided an enormous production hinterland and market outlet for Hong Kong's manufacturers, but also created abundant business opportunities for a wide range of service providers. Hong Kong has continued to re-orientate itself towards service activities, prompted by the changing regional and global economic environment and also by closer integration with the Mainland. In particular, while the thriving Mainland economy has provided ample business opportunities for Hong Kong's services sector, the availability of cheaper land and labour on the Mainland side giving rise to improved competitiveness and productivity there has also propelled Hong Kong's move up the value chain.