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Hong Kong's external direct investment (DI) statistics for 2011 were released today (December 10) by the Census and Statistics Department (C&SD).
Stocks of inward and outward DI
At the end of 2011, the stock of Hong Kong's inward DI increased by 0.9% from a year earlier to $8,377.0 billion at market value. Its ratio to GDP stood at 433% in 2011. The increase in the stock of Hong Kong's inward DI in 2011 was mainly attributable to 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 2011, at 36.3%, reflecting the importance of investment from the Mainland in Hong Kong. The investment of the Mainland 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 Bermuda, accounting for 31.1% and 7.1% respectively of the total stock of Hong Kong's inward DI at end 2011.
Analysed by major economic activity of Hong Kong enterprise groups (HKEGs) having received inward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 66.9% of the total stock at end 2011. This was followed by banking, at 11.3%; and import/export, wholesale and retail trades, at 9.5%.
At the end of 2011, the stock of Hong Kong's outward DI increased by 8.3% from a year earlier to $7,946.4 billion at market value. Its ratio to GDP was 411% in 2011. 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 Mainland was the most important destination for Hong Kong's outward DI, with a share of 42.1% of the total stock at end 2011. Guangdong Province remained a popular location for Hong Kong's investment in the Mainland, accounting for 32.9% (or $1,101.2 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.
The BVI was the second largest, accounting for 41.8% of the total stock of Hong Kong's outward DI at end 2011.
Analysed by major 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 76.3% of the total stock at end 2011. This was followed by import/export, wholesale and retail trades, at 6.8%; and banking, at 3.7%.
Flows of inward and outward DI
In 2011, total DI inflow amounted to $751.8 billion, larger than that of $548.0 billion in 2010. The Mainland was the major source of Hong Kong's DI inflow in 2011, amounting to $318.1 billion. The BVI came next, at $151.5 billion. Analysed by major economic activity of HKEGs having received DI inflow, those engaged in investment and holding, real estate, professional and business services attracted the largest amount of the total DI inflow in 2011, at $412.2 billion.
On the other hand, total DI outflow in 2011 amounted to $749.9 billion, larger than that of $670.1 billion in 2010. The Mainland accounted for a predominant part of Hong Kong's DI outflow in 2011, at $393.1 billion. Analysed by major economic activity of HKEGs having made DI outflow, those engaged in investment and holding, real estate, professional and business services took up the largest amount of the total DI outflow, at $611.1 billion.
Taking the inflow and outflow together, a net DI inflow of $1.9 billion was recorded in 2011.
Commentary
A Government spokesman said that the stocks of inward and outward direct investment at end-2011 expanded further from a year earlier, notwithstanding the more difficult global economic environment during the year. The ratios of inward and outward direct investment to the size of the Hong Kong economy stood at 433% and 411% respectively, a continued manifestation of Hong Kong's competitive strength as an international financial centre and a regional business hub.
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 activities between the Mainland and Hong Kong should continue to strengthen with the ever growing economic ties between the two places and the further development of offshore Renminbi business in Hong Kong. The Government will also foster economic linkages with other parts of the world, particularly the emerging markets.
Further Information
DI represents external investment in which an investor of an economy acquires a lasting interest and a significant degree of influence or an effective voice in the management of an enterprise located in another economy. For statistical purpose, an effective voice is taken as being equivalent to a holding of 10% or more of the voting power in an enterprise.
The DI statistics are compiled based on data obtained from the Survey of External Claims, Liabilities and Income (SECLI) conducted by the C&SD, supplemented by data from other sources.
The entire DI data series has been revised following the completion of a technical exercise by the C&SD in September 2012 to incorporate the latest international statistical standards in the compilation framework of DI statistics of Hong Kong. The conceptual and methodological details of the technical revision are presented in the report Balance of Payments, International Investment Position and External Debt Statistics of Hong Kong, Second Quarter 2012 published by the C&SD. The publication can be downloaded free of charge at the website of the C&SD (www.censtatd.gov.hk/hkstat/sub/sp260.jsp?productCode=B1040001).
DI figures analysed by country/territory and by economic activity presented above are based on the "directional principle" as recommended in Fourth Edition of Benchmark Definition of Foreign Direct Investment published by the Organisation for Economic Co-operation and Development. These figures are different from the aggregate DI figures presented in the Balance of Payments framework which are based on the "asset/liability principle". However, the overall direct investment balance compiled from these two sets of figures respectively is the same. The revised series of DI figures analysed by country/territory and by economic activity subsequent to the aforesaid technical revision can be found at the website of the C&SD (www.censtatd.gov.hk/hkstat/sub/sp260.jsp).
Compiled on the basis of the revised data series subsequent to the aforesaid technical revision, Tables 1 and 2 show the stocks and flows of inward DI in Hong Kong for 2010 and 2011, with breakdowns by major investor country/territory and by major economic activity of HKEGs respectively. Similar statistics on outward DI from Hong Kong for 2010 and 2011, with breakdowns by major recipient country/territory and by major economic activity of HKEGs, are presented in Tables 3 and 4.
Further details of DI statistics for 2011 are published in the report External Direct Investment Statistics of Hong Kong 2011. The publication can be downloaded free of charge at the website of the C&SD (www.censtatd.gov.hk/hkstat/sub/sp260.jsp?productCode=B1040003).
Enquiries about the DI statistics may be directed to the Balance of Payments Branch (2) of the C&SD at 2116 5150.
Ends/Monday, December 10, 2012
Issued at HKT 16:30
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