The Manufacturing Sector

Automation, technology upgrading and relocation of lower value-added operations to the Mainland have accelerated the development of more knowledge-based and higher value-added manufacturing, as well as manufacturing-related services or producer services. Expansion of manufacturing activities offshore since the 1980s has turned Hong Kong into a strategic control centre of an increasingly globalised production network. In spite of the structural change, the manufacturing sector remained an important sector of the economy, providing employment to 202 984 persons (9 per cent of the total private sector employees) in December 2001.

The clothing industry was the largest employer in the manufacturing sector in 2001, followed by the printing and publishing industries. Chart 2 shows the breakdown of employment within the manufacturing sector in 2001.

Chart 2: Number of Persons Employed by the Manufacturing Sector in 2001*

* As at September

The manufacturing sector remains export-oriented and its excellent performance contributed to Hong Kong's ranking as one of the world's leading exporters of textiles, clothing, watches and clocks, toys and jewellery.

The manufacturing sector is dominated by small and medium enterprises (SMEs). Of the 19 977 manufacturing establishments in 2001, 19 723 (98.7 per cent) employed fewer than 100 persons, accounting for 64.3 per cent of Hong Kong's total manufacturing employment. Many SMEs are linked with larger factories through an efficient and flexible sub-contracting network. This arrangement has enabled the manufacturing sector to respond swiftly to market changes.