Analysis of Hong Kong Economy During Financial Crisis

Topics: Financial services, Economy, International trade Pages: 12 (3939 words) Published: March 26, 2013

Proceedings of the 7th International Conference on Innovation & Management

An Analysis of the Hong Kong Economy after the Financial Crisis Cao Hongliu School of Management, Guangdong University of Technology, Guangdong, P.R.China, 510520 (E-mail: Abstract This paper analyzes the current economic development and the status of leading industries in Hong Kong. It shows that Hong Kong economy, which is mainly comprised of the service industry in particular, facing with both opportunities and challenges after the financial crisis. Hong Kong economy has a wide range of needs in information technology, electrical and electronic technology, and manufacturing technology. Development in these areas has great significance to ensure sustained development of Hong Kong economy. Key words Hong Kong economy status; Leading industry; Service industry

1 Introduction
Hong Kong’s a small and open economy system and international financial center, its economic development face many new challenges because of the impact of the global financial crisis. Therefore, a comprehensive analysis of the Hong Kong’s economic development and their leading industry status becomes an important issue.

2 Overview of Hong Kong Economy
2.1 The services sector is a leading industry in Hong Kong From Table 1, we can see that the services industry is a leading industry of Hong Kong economy. During the decade from 1997 to 2006, services sector in the Hong Kong economy has gained greater prominence. This change has already been reflected in the share of contribution of the services sector to the local GDP. The contribution of the services sector to GDP increased from 85.9% in 1997 to 91.2% in 2006. Based on the industry definition of Hong Kong Census and Statistics Department, The services sector includes wholesale, retail and import and export trades, restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; and community, social and personal services. Table 1 Gross Domestic Product (GDP) by Economic Activity (at Current Prices)

GDP by Economic Activity(2004-2007)
2004 2005 2006 2007

Economic activity Agriculture and fishing Mining and quarrying Manufacturing Electricity, gas and water Construction

GDP 886 72 44455 39726 40376

ratio 0.1 * 3.6 3.2 3.2

GDP 847 100 45547 39924 38538

ratio 0.1 * 3.4 3 2.9

GDP 849 93 45761 40364 38688

ratio 0.1 * 3.2 2.8 2.7

GDP 895 114 39282 39426 40154

ratio 0.1 * 2.5 2.5 2.6

Services 1119304 89.9 1207873 90.6 1297545 91.2 1429293 92.3 Note: Data is from Hong Kong Annual Digest of Statistics (2004-2008 Edition) edited by Hong Kong Census and Statistics Department. Data unit is in million terms and ratio unit is %. Besides, * represents the comparison had less than 0.05% is in the total economy

The services sector becomes the principal source of employment. The employment share of the services sector in total employment has increased moderately over the past decade, from 79.8% in 1997 to 86.6% in 2007. In 2007, the services sector as a whole engaged 3.03 million persons out of the 3.5 million overall employments. The services sector plays a significant role in supporting the growth of our external trade. In 2007, the value of exports of services reached $652 billion, representing an average annual growth rate of


Proceedings of the 7th International Conference on Innovation & Management


8.6% over 1997. In 2007, merchant and other trade-related services was the most important major service group, contributing 30.9% to the value of total exports of services. It was followed by transportation services and travel services, contributing 28.6% and 16.5% respectively to the value of total exports of services in 2007. In 1997, the respective percentage shares of these three major service groups in the value of total exports of services were 25.6%, 30.5% and 20.8%. 2.2 The structure of Hong...

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