Hong Kong - Economic sectors

The economy of Hong Kong survived the financial crisis of 1997-98. This service-dominated economy began its recovery in 1999 and continued it in 2000 thanks to its viable service sector. To a varying extent, the 3 economic

sectors suffered from the crisis. The impact of the crisis on agriculture, the smallest sector with a very small contribution to the Hong Kong economy, was negligible. However, the industry and particularly the service sectors suffered considerably and experienced contraction during the crisis period. The CIA World Factbook reported the percentages of each sector's contribution to GDP in 1997 to be agriculture, 0.1 percent; industry, 14.7 percent; and services, 85.2 percent. As the largest and dominant economic sector, the service sector has always been the engine of growth and includes international trade, financial services, tourism, retail, and real estate. These service industries are the largest employers and taxpayers.

The industry and service sectors have undergone structural changes over the last decades. The catalyst has been the gradual relocation of large and labor-intensive manufacturing to mainland China, which began in the early 1980s. This trend has been reinforced since the 1997 hand-over of Hong Kong to China. As a result, the industry's manufacturing branch has been shrinking. The service sector has been expanding to re-orient itself towards functions pertaining to China's international trade.

The reunification with China has not changed the business-friendly environment of Hong Kong. As promised, China has respected the autonomy of the territory in its internal affairs, including its economic policies. China's approach has bolstered the confidence of the local and international business community in the stability and predictability of Hong Kong, which became somewhat shaky on the eve of the 1997 hand-over. Hong Kong is as friendly as ever to local and foreign investors, including Western (American, British, French, Swiss, and Dutch) and non-Western (Japanese and South Korean) multinational corporations (MNCs).

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