ENG-2018 — Page 71

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The Economy

The services sector is the mainstay of the Hong Kong economy. As the Mainland economy rebalances towards services- and consumption-led growth and opens up further, ample opportunities have become available for service providers in Hong Kong. With its geographical proximity, cultural ties with the Mainland and strong market institutions, Hong Kong has leveraged its competitive strengths in services in the Mainland's continuous move towards high value-added activities.

Services' contribution to GDP made up 92 per cent in 2017. The largest services sector was still financing and insurance, real estate, professional and business services, accounting for 30 per cent of GDP. This was followed by import/export, wholesale and retail trades, accommodation and food services (25 per cent); public administration, social and personal services (18 per cent); and transportation, storage, postal and courier services, and information and communications (9 per cent). In terms of total employment, services took up 88 per cent in 2018. In particular, import/export, wholesale and retail trades, accommodation and food services accounted for 30 per cent of total employment, followed by public administration, social and personal services with a share of 27 per cent; financing and insurance, real estate, professional and business services (21 per cent); and transportation, storage, postal and courier services, information and communications (11 per cent) (chart 3).

Chart 3

Gross Domestic Product and Employment by Major Service Sector

Gross Domestic Product

2017

Transportation, storage, postal and courier services, information and communications

9.4%

Financing and insurance, real estate, professional and business services 29.7%

11%

Import/export, wholesale and retail trades, accommodation

and food services 24.8%

Other sectors 17.9%

Transportation, storage, postal and courier services,

information and

communications

Employment 2018

Public administration, social and personal services 18.2%

Import/export, wholesale and retail trades, accommodation

and food services 29.6%

Other sectors 11.7%

Financing and insurance,

real estate, professional

and business services 20.7%

Public administration, social and personal services 27%

The services sector continued to be the key driver of the economy.

It is worth noting that although the manufacturing sector does not make large direct contributions to the economy in terms of value added and employment, Hong Kong's manufacturers are versatile and resilient in coping with the changing global and regional economic landscapes. The city's productive capacity has effectively expanded, thanks to increased supply-chain arrangements involving the Mainland and other neighbouring economies. The well-established links between the offshore productive capacity and the local economy underpin the growth of Hong Kong's services, especially the rapid development of trading, financial and other support services.

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