The Service Sector

Along with the structural change in the economy, the service sector has
flourished and diversified in types of activities. The growth and
development in finance and business services, including banking,
insurance, real estate, and a wide range of other professional services has
been particularly rapid.

Between 1987 and 1997, exports of services in real terms grew by an
average of 6 per cent per annum, while that of imports of services
increased by 8 per cent. The major components of Hong Kong's trade in
services are civil aviation, shipping, travel and tourism, trade-related
services, and various financial and banking services. The shares of
transportation services in total exports and total imports of services were
35 per cent and 23 per cent respectively in 1996. The corresponding
shares for travel and tourism were 29 per cent and 53 per cent.
Trade-related services including offshore trading and
purchasing/merchandising services took up 19 per cent of the total value
of exports of services and 6 per cent of the total value of imports of
services. The respective shares for financial and banking services were
7 per cent and 4 per cent.

Analysed by sector, the wholesale, retail and import/export trades,
restaurants and hotels was the largest contributor to the GDP, with its
share rising to slightly more than 25 per cent in 1996, from 21 per cent in
1980 and 25 per cent in 1990. The second-largest contributor was
financing, insurance, real estate and business services, contributing
another 25 per cent in 1996. The corresponding shares in 1980 and 1990
were 23 per cent and 20 per cent. The share of community, social and
personal services in the GDP was 18 per cent in 1996, rising from 12 per
cent in 1980 and 15 per cent in 1990. The share of transport, storage and
communications in the GDP also increased, to 10 per cent in 1996 from
7 per cent in 1980 and 9 per cent in 1990.

Chart 4 Gross Domestic Product by major service sector
The distributive and catering trades as well as financing, insurance,
real estate and business services remained the largest sectors in
terms of contribution to GDP.

(1980)

(1996)

Between 1986 and 1996, the net output or valued-added component of the
financing, insurance, real estate and business services sector recorded the
fastest increase (by 19 per cent); followed by transport, storage and
communications (by 17 per cent), the wholesale, retail and import/export
trades, restaurants and hotels (by 16 per cent); and community, social and
personal services (by 15 per cent). The value added of the service sectors
as a whole rose markedly, by an average of 16 per cent per annum over
this period.

As regards the contribution to total employment, the service sector as a
whole accounted for about 79 per cent in 1997. Within this total, the
wholesale, retail and import/export trades, restaurants and hotels was the
largest employer in the service sectors, accounting for about 34 per cent
of the total employment in 1997. This was followed by community, social
and personal services (21 per cent); financing, insurance, real estate and
business services (13 per cent); and transport, storage and
communications (11 per cent).

Chart 5 Employment by major service sector
Over the years, the distributive and catering trades, community, social and
personal services, as well as financing, insurance, real estate and
business services have become important employers in the
services sector. *Average of Q1 to Q3 1997.

(1980)

(1997*)

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