P. 1 Types of Production Ch. 7 Production 7.1 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.

P. 2 Types of Production 2.Secondary production 2.Secondary production 1.Primary production 1.Primary production 3.Tertiary production 3.Tertiary production

P. 3 Types of Production Primary production Primary production means activities which directly extract resources 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

P. 4 Types of Production

P. 5 Types of Production

P. 6 Types of Production

P. 7 Types of Production

P. 8 Types of Production Primary production in Hong Kong Primary 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.total labour forcetotal output P.134 Process = primary production People = primary producers Product = primary product = basic foodstuffs (e.g. vegetables, pigs, poultry, marine produce) & raw materials (e.g. high-value cut flowers, rock products)

P. 9 Types of Production Composition of GDP (by types of production)

P. 10 Types of Production Secondary production Secondary production refers to those activities which change raw materials 原料 into semi- finished 半製成品 goods or finished goods. (a)Manufacturing 製造業 (b)Construction 建造業 (c)Public utilities, e.g. gas 煤氣, water, electricity 電

P. 11 Types of Production (a)Manufacturing Secondary producers change raw materials produced by primary producers into products. The products may be finished 製成 products or semi-finished products. Finished products include consumer goods such as clothing, watches and electrical appliances.

P. 12 Types of Production (b)Construction Construction includes the building of houses, roads, tunnels, etc.

P. 13 Types of Production (c)Public utilities Public utilities are the products that are provided to the general public. Examples are: electricity water gas

P. 14 Types of Production (c)Public utilities For the production of electricity and gas, petroleum and coal are used as raw materials. Water is processed to make it ready for domestic and commercial uses. Hence, they are classified as secondary productions.

P. 15 Types of Production (c)Public utilities Provision of electricity 1)The Hongkong Electric GroupThe Hongkong Electric Group 2)CLP Holdings LtdCLP Holdings Ltd Provision of gas Towngas Provision of water Water Supplies Department

P. 16 Types of Production Secondary 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.their significance P.135 Process = secondary production People = secondary producers Product = secondary product = finished products for final consumption, e.g., watches, or semi- finished products for further production, e.g., iron bars

P. 17 Types of Production 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 Kong

P. 18 Types of Production Figure 5.1 (a) The percentages of persons employed by the manufacturing sector in Clothing Printing, publishing and allied industries Electronics Food & Beverages Textiles Metal Products Others 23.9% 18.0% 10.4% 8.5% 6.7% 4.6% 27.8%

P. 19 Types of Production Figure 5.1 (b) Domestic exports of the manufacturing sector in Clothing Electronics Textiles Chemicals Jewellery Watches and Clocks Others 43.5% 22.8% 5.6% 3.3% 3.0% 18.9% Guided MCQ Practice

P. 20 Types of Production Tertiary production can be divided into five main groups, according to the Census and Statistics Department: Tertiary production Tertiary production is the provision of different kinds of services. P.136 Process = tertiary production People = tertiary producers Product = tertiary product = services

P. 21 Types of Production (a)Wholesale, retail, import and export trades (i.e. commercial services), restaurants and hotels. (b)Transport, storage and communications (c)Financing, insurance, real estate and business services (d)Community, social and personal services (e)Ownership of premises Tertiary production Tertiary production includes

P. 22 Types of Production (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.

P. 23 Types of Production Hotel staff contribute to invisible export.

P. 24 Types of Production (b)Transport 運輸, storage 倉庫 and communications 通訊 lorry drivers; warehouse keepers; telecommunication operators.

P. 25 Types of Production Lorries facilitate the logistics of production and trade.

P. 26 Types of Production (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;

P. 27 Types of Production A bank provides credits for production and trade.

P. 28 Types of Production (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

P. 29 Types of Production

P. 30 Types of Production (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 Guided MCQ Practice

P. 31 Types of Production P.137 Understanding employment data Primary production employment dropped from 1.5% in 1980 to 0.4% in It does not necessarily mean that primary production employed fewer workers in Labor force (= number of worker) in 1999 > that in 1980, i.e., 3.36 million in 1999 & 2.32 million in Primary producers in 1980 = = 2.32 million x 1.5% Primary producers in 1999 = = 3.36 million x 0.4% Percentage employed byPrimarySecondaryTertiary %50.1%48.4% %17.9%81.7%

P. 32 Types of Production P.138 Interdependence 互相依賴 of production PP SPTP Food, raw material service Semi- finished good service Food, raw material finished good