P. 1Types of ProductionTypes of ProductionTypes of ProductionTypes of Production

Ch. 7 ProductionCh. 7 Production7.1 Production is the process of using resources 資源 (inputs) to provide 提供 goods and services (outputs).

7.2 Types of production• In economics, there are three types of production. These are primary production 初級生產 , secondary 次級 production and tertiary 三級 production. We classify production according to the production process or product nature .

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Types of ProductionTypes of Production

2.2. Secondary productionSecondary production

1.1. Primary productionPrimary production

3.3. Tertiary productionTertiary production

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Primary productionPrimary production means act

ivities which directly extract reso

urces 資源 from nature 天然 .

Examples are(a) Farming 農業(b) Fishing 捕漁業(c) Logging(d) Mining 採礦業 and quarrying 採石業

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Primary production in Hong KongPrimary production in Hong KongPrimary production in Hong KongPrimary production in Hong KongPrimary production in Hong Kong is not important 重要 . It employs less than 1% of the total labour force 就業人數 & produces 0.2% of total output 總生產 .

P.134 Process = primary productionPeople = primary producers Product = primary product = basic foodstuffs (e.g. vegetables, pigs, poultry, marine produce) & raw materials (e.g. high-value cut flowers, rock products)

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Composition of GDP (by types of production)

19950.1%

16.0%

83.8%

1980

1.5%

50.1%48.3%

Primary Production Secondary Production

Tertiary Production

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Secondary production Secondary production refers t

o those activities which change r

aw materials 原料 into semi-finish

ed 半製成品 goods or finished go

ods.(a) Manufacturing 製造業(b) Construction 建造業(c) Public utilities, e.g. gas 煤氣 , water, electricity 電

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(a) Manufacturing

Secondary producers change raw

materials produced by primary pro

ducers into products. The products

may be finished 製成 products or s

emi-finished products. Finished pr

oducts include consumer goods su

ch as clothing, watches and electri

cal appliances.

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(b) Construction

Construction includes the building

of houses, roads, tunnels, etc.

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(c) Public utilities

Public utilities are the products

that are provided to the general

public. Examples are:

• electricity• water• gas

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(c) Public utilities

For the production of electricity an

d gas, petroleum and coal are used

as raw materials.

Water is processed to make it ready for dome

stic and commercial uses.

Hence, they are classified as secondary

productions.

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Secondary production in Hong KongSecondary production in Hong Kong

In the past, manufacturing industries were very

important to Hong Kong.However, their significance has been declining

下跌 since the 1980s.

P.135 Process = secondary productionPeople = secondary producers Product = secondary product = finished products for final consumption, e.g., watches, or semi-finished products for further production, e.g., iron bars

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This is because the opening of the

Mainland China has helped China

become more competitive in this

sector.

Many factories in Hong Kong have closed down

and moved 遷往 north to southern China.

Secondary production in Hong KongSecondary production in Hong Kong

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Figure 5.1 (a) The percentages of persons employed

by the manufacturing sector in 1999.

Clothing

Printing, publishing and allied industriesElectronics

Food & Beverages

Textiles

Metal Products

Others

23.9%

18.0%

10.4%

8.5%

6.7%

4.6%

27.8%

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Figure 5.1 (b) Domestic exports of the manufacturing

sector in 1999.

Clothing

Electronics

Textiles

Chemicals

Jewellery

Watches and Clocks

Others

43.5%

22.8%

5.6%

3.3%

3.0%

3.0%

18.9%

Guided MCQ Practice Guided MCQ Practice

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Tertiary production can be divided into five main gr

oups, according to the Census and Statistics Depar

tment:

Tertiary productionTertiary production is the provision of different

kinds of services.P.136 Process = tertiary productionPeople = tertiary producers Product = tertiary product = services

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(a) Wholesale 批發 , retail 零售業 , import and export 進出口 trades 貿易 (i.e. commercial services), restaurants and hotels 酒店 .• exporters;• importers;• wholesalers;• retailers;• waiters and waitresses.

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Hotel staff contribute to invisible export.

Hotel staff contribute to invisible export.

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(b) Transport 運輸 , storage 倉庫 and communications 通訊• lorry drivers;• warehouse keepers;• telecommunication operators.

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Lorries facilitate the logistics of production and

trade.

Lorries facilitate the logistics of production and

trade.

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(c) Financing 金融 , insurance 保險 , real estate地產 and business 商用 services

• architects; • contractors;• auditors;• lawyers;

• advertisers; • market researchers;• bankers;• insurance agents;

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A bank provides credits for production and

trade.

A bank provides credits for production and

trade.

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(d) Community 社區 , social and personal 個人 services• doctors • nurses• lawyers• judges• policemen• hairdressers

• accountants • teachers• actors• domestic servants• street cleaners• social workers

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(e) Ownership of premises 樓宇 (houses)

Firms and individuals sometimes choose to

invest in premises.

The premises generate housing services. In

Hong Kong, these services formed a 14.7%

share of total output in 1999.

Guided MCQ Practice Guided MCQ Practice

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P.137 Understanding employment data

• Primary production employment dropped from 1.5% in 1980 to 0.4% in 1999. It does not necessarily mean that primary production employed fewer workers in 1999.

• Labor force (= number of worker) in 1999 > that in 1980, i.e., 3.36 million in 1999 & 2.32 million in 1980.

• Primary producers in 1980 = 34800 = 2.32 million x 1.5%• Primary producers in 1999 = 13436 = 3.36 million x 0.4%

Percentage employed by Primary Secondary Tertiary

1980 1.5% 50.1% 48.4%

1999 0.4% 17.9% 81.7%

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P.138 Interdependence 互相依賴 of production

PP

SP TP

Food, raw material

service

Semi-finished good

service

Food, raw material

finished good