The services sector has grown significantly in the past two decades. Its share of Hong Kong's Gross Domestic Product (GDP) rose from 67.2 per cent in 1984 to 88.5 per cent in 2003. In 2004, 85.6 per cent of total employment was in the services sector. Hong Kong has become one of the most service-oriented economies in the world. Much of this growth was fuelled by the demand for producer services by Hong Kong's globalised production network and the trend to source goods and services globally.

Like manufacturing, the services sector is dominated by SMEs. In 2004, 98.2 per cent of Hong Kong's 273 000 service establishments were SMEs (fewer than 50 persons). Together, they employed 1.2 million persons (59.3 per cent of employment in selected service industries in the private sector).

In 2004, Hong Kong's total services trade amounted to US$81.2 billion, making it the world's 15th largest trading entity in terms of value of services trade. In the same year, Hong Kong exported US$52.3 billion worth of services, bearing a ratio of 31.8 per cent of GDP. Hong Kong ranked third after Japan and the Mainland in the region in terms of absolute value of exports of services. In the global league table of exports of services, Hong Kong ranked 10th in 2004.

Hong Kong's exports of services comprise mainly merchanting and other trade-related services, transportation and travel services, which accounted for 36 per cent, 32 per cent and 17 per cent respectively of the total value in 2004. The corresponding share for exports of financial services, insurance and other services was 15 per cent. In addition to being a net exporter of services in overall terms, analysed by component of services trade, in 2004 Hong Kong recorded a surplus in merchanting and other trade-related services (US$16.1 billion) and transportation services (US$9.3 billion).