Local fisheries resources have been in decline for many years: catches landed in Hong Kong have declined from a peak of just over 90,000 metric tonnes in 1976, to a level of just over 50,000 tonnes in 1996 (ERM 1998a). An accurate characterisation of the resource is complicated by the fact that much of the fish landed in Hong Kong is caught outside the territorial waters of Hong Kong (thereby inflating the landings over that actually caught in Hong Kong) and some of the fish caught in Hong Kong waters are landed in Mainland ports or traded at sea to other nation's fishermen (thereby deflating the landings tallies). Regardless of the exact dimensions of the Hong Kong trends, stocks in the wider South China Sea area are known to be depleted as a result of intensive fishing by regional fishing fleets (Silvestre and Pauly 1997).

In parallel with the decline in landings, species composition data for Hong Kong marine fish stocks show an apparent trend of declining numbers of commercially valuable demersal inshore fish species and a reduction in the size and fecundity of those species which are still present. Information from 1940 indicates that large groupers and wrasses, which are prized table fish, were common at large sizes in Hong Kong waters. Today, these species if present at all, are extremely rare, and the three dominant fish species caught inshore (the brown coral cod (Cephalopholis boenack), the rockfish (Scorpaenidae) and the rabbitfish (Siganidae)) are of a substantially lower commercial value. In a recent study for AFCD (ERM 1998a), detailed assessments of the exploitation status of 17 fish species commonly caught in Hong Kong waters found that 12 of the species are classified as heavily overexploited, while the remainder (principally the small, low value, high-turnover species) fall into the fully exploited category.

In the same study, the exploitation status of Hong Kong's inshore fishery resources was evaluated through extensive analysis of trawl and fishermen's interview data. The survey estimated that inshore resources were comprised of over 80% fast-growing, low-value pelagic species. The majority of these fishes are sold for low grade uses such as production of fish meal to feed fish in mariculture operations or in making fish balls. The total fisheries production from Hong Kong waters was estimated at 17,681 tonnes per annum. Furthermore, the stock assessment analysis revealed that the total annual catch is approximately equal to the total annual standing stock biomass, or in other words, every fish available to be caught by the fishery is being caught. These findings indicate the fishery is economically sub-optimal since if the stock were allowed to mature further before capture, each individual caught would both command a higher market price (ie larger size fish) and produce a greater number of larvae to recruit to the fishery the following year.