As an aside, the market mechanism, efficient and powerful though it may be, is in some respects quite fragile. It goes awry under excessive environmental volatility. Regardless of one's political leaning, one must agree that stability is a necessary condition for prosperity, but I hasten to add, not a sufficient condition. After all, manufacturing employment has declined steadily since 1980 from over 1.5 million to just over half a million and manufacturing as a percentage of GDP has declined from around 24 percent to 13 percent during the same period. To surmise from these statistics that industrial activity is losing its relative importance to Hong Kong is akin to treating a three dimensional object as being two dimensional.
Lets take a look at the third dimension.
Hong Kong's unified stock exchange came into being in 1986. Between the end of 1986 and 1992, the last year for which compiled statistics are available, the market capitalization of industrial stocks grew by some 300 percent, that is fourfold. In comparison, the capitalization of all stocks grew by about 200 percent. Stock market statistics do not show a complete picture of general economic performance. Nonetheless, as a rough approximation, I would venture that the rate of growth of industrial activity generated wealth has significantly outpaced that of other sectors, roughly 15 percent versus 10 percent, on an annualized basis after adjusting for inflation, the preponderance of property related wealth in Hong Kong notwithstanding.