The Manufacturing Sector

Restructuring of the manufacturing sector reduced its contribution to
GDP from 18 per cent in 1990 to about 7 per cent in 1996, but it
continued to be an important sector of the economy. It was Hong Kong's
fourth-largest employer, employing 309 160 persons (12 per cent of the
total employment) in 1997. Mechanisation, automation and relocation of
assembly-type operations to the Mainland of China have accelerated the
development of more knowledge-based and higher-value-added
manufacturing.

The clothing industry was the largest employer in the manufacturing
sector in 1997, followed by the printing, publishing and allied industries.
Chart 1 shows the breakdown of employment within the manufacturing
sector in 1997.

Chart 1 Number of Persons Employed by the Manufacturing
Sector in 1997

Manufacturing establishments in Hong Kong are generally small. Of the
26 397 manufacturing establishments in 1997, 25 398 employed fewer
than 50 people. They however accounted for 51 per cent of Hong Kong's
total manufacturing employment. Many small establishments are linked
with larger factories through an efficient and flexible sub-contracting
network. This arrangement has enabled the manufacturing sector to
respond swiftly to changes in demand.

The manufacturing sector remains export-oriented. About 80 per cent of
the products manufactured were exported. Domestic exports amounted to
$211.41 billion million in 1997. Major export items included clothing,
electronics, textiles, watches and clocks, and chemical products. In 1995,
Hong Kong was the world's leading exporter of clothing, watches and
clocks.

Major export markets in 1997 were the Mainland of China (30.2 per cent),
the USA (26.1 per cent), the United Kingdom (5.1 per cent), Japan (5 per
cent) and Germany (4.9 per cent). The clothing industry was also the
largest export-earner in the manufacturing sector, followed by the
electronics industry. Chart 2 shows the value of domestic exports of the
major industries in 1997.

Chart 2 Value of Domestic Exports of the Manufacturing Sector
in 1997.

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