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Hong Kong's external direct investment (DI) statistics for 2010 are released today (December 9) by the Census and Statistics Department (C&SD).
Stocks of inward and outward DI
At the end of 2010, the stock of Hong Kong's inward DI increased by 16.7% from a year earlier to $8,473.2 billion at market value. Its ratio to GDP stood at 486% in 2010. The increase in the stock of Hong Kong's inward DI in 2010 was mainly attributable to a rise in the total market values of Hong Kong enterprise groups (HKEGs) having received inward DI and also the positive DI inflow to Hong Kong.
Analysed by immediate source of investment, the mainland of China (the Mainland) accounted for the largest share of the total stock at end 2010, at 36.9%, reflecting the importance of investment from the Mainland in Hong Kong. The Mainland's investment in Hong Kong covered a wide range of economic activities, including investment and holding, real estate, professional and business services; import/export, wholesale and retail trades; and banking.
Other major immediate sources of investment included the British Virgin Islands (BVI) and the Netherlands, accounting for 32.5% and 7.1% respectively of the total stock of Hong Kong's inward DI at end 2010.
Analysed by economic activity of HKEGs having received inward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 66.5% of the total stock at end 2010. This was followed by banking, at 12.1%; and import/export, wholesale and retail trades, at 9.7%.
At the end of 2010, the stock of Hong Kong's outward DI increased by 12.8% from a year earlier to $7,277.1 billion at market value. Its ratio to GDP was 417% in 2010. The increase in the stock of outward DI was mainly attributable to the positive DI outflow from HKEGs to enterprises outside Hong Kong.
Analysed by immediate destination of investment, the BVI was the most important destination for Hong Kong's outward DI, with a share of 43.1% of the total stock at end 2010.
The Mainland was the second largest, accounting for 42.2% of the total stock of Hong Kong's outward DI at end 2010. Guangdong Province remained a popular location for Hong Kong's investment in the Mainland, accounting for 30.0% (or $920.7 billion) of the total stock of Hong Kong's outward DI to the Mainland. The most common economic activities undertaken by Hong Kong's direct investment enterprises in the Mainland were information and communications; investment and holding, real estate, professional and business services; and manufacturing.
Analysed by economic activity of HKEGs having made outward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 72.8% of the total stock at end 2010. This was followed by import/export, wholesale and retail trades, at 9.1%; and banking, at 4.1%.
Flows of inward and outward DI
In 2010, total DI inflow amounted to $552.2 billion, larger than that of $406.1 billion in 2009. The Mainland was the major source of Hong Kong's DI inflow in 2010, amounting to $276.3 billion. The BVI came next, at $253.4 billion. Analysed by economic activity of HKEGs having received DI inflow, those engaged in investment and holding, real estate, professional and business services attracted the largest share of the total DI inflow in 2010, at $439.5 billion.
On the other hand, total DI outflow in 2010 amounted to $741.1 billion, larger than that of $496.0 billion in 2009. The Mainland accounted for a predominant part of Hong Kong's DI outflow in 2010, at $329.7 billion. Analysed by economic activity of HKEGs having made DI outflow, those engaged in investment and holding, real estate, professional and business services took up the largest share of the total DI outflow, amounting to $514.6 billion.
Taking DI inflow and outflow together, a net outflow of $189.0 billion was recorded in 2010.
Commentary
A Government spokesman said that the stocks of inward and outward direct investment at end-2010 grew appreciably further over a year earlier, amid the worldwide economic recovery and thriving global financial market activities. The ratios of inward and outward direct investment to the size of the Hong Kong economy stood at 486% and 417% respectively, a continued manifestation of Hong Kong's position as a regional business hub and an international financial centre.
The spokesman noted that the Mainland continued to feature prominently in Hong Kong's external direct investment, both as a source and a destination, covering a wide range of economic activities. Looking ahead, investment ties between the Mainland and Hong Kong should strengthen further with the deepening economic integration between the two places and the rapid development of offshore Renminbi business in Hong Kong. Meanwhile, the Government will continue to foster economic links with other parts of the world, particularly the emerging markets.
Further information
DI represents investment which allows investors in one economy to have a lasting interest and a significant degree of influence or an effective voice in the management of an enterprise in another economy. For statistical purpose, an effective voice is taken as equivalent to a holding of 10% or more of the voting power in an enterprise.
Hong Kong compiles DI statistics in conformity with the prescriptions in the Fifth Edition of the Balance of Payments Manual of the International Monetary Fund (IMF). The DI statistics are compiled on the basis of data obtained from the Survey of External Claims, Liabilities and Income conducted by the C&SD, supplemented by data from other sources.
Tables 1 and 2 show the stocks and flows of inward DI in Hong Kong for 2009 and 2010, with breakdowns by major country/territory and by economic activity of HKEGs respectively. Similar statistics on outward DI from Hong Kong for 2009 and 2010 are presented in Tables 3 and 4.
The classification of economic activities of HKEGs follows the Hong Kong Standard Industrial Classification (HSIC), which is used in various economic surveys for classifying economic units into different industry classes. Upon the implementation of the new HSIC Version 2.0 by the C&SD in October 2008, the new classification has been adopted in compiling the DI statistics. Starting from the reference year of 2009, all the DI statistics, unless otherwise specified, are compiled based on the HSIC Version 2.0. The series of DI statistics under the HSIC Version 2.0 has also been backcasted to 2004.
Further details of DI statistics for 2010 are published in the report ˇ§External Direct Investment Statistics of Hong Kong 2010ˇ¨. Users can download this publication free of charge at the website of the C&SD (www.censtatd.gov.hk/products_and_services/products/publications/statistical_report/index.jsp).
Enquiries about the DI statistics may be directed to the Balance of Payments Branch (2) of the C&SD at 2116 5150.
Ends/Friday, December 9, 2011
Issued at HKT 16:30
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