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Hong Kong's external direct investment (DI) statistics for 2013 were released today (December 11) by the Census and Statistics Department (C&SD).
Positions of DI
At the end of 2013, the position of Hong Kong's DI liabilities increased by 8.0% over a year earlier to $11,346.7 billion. Its ratio to GDP stood at 534% in 2013. The increase in the position of Hong Kong's DI liabilities in 2013 was mainly attributable to the positive DI inflow to Hong Kong during the year.
Analysed by immediate source of investment, the British Virgin Islands (BVI) was the most important source for Hong Kong's inward DI, with a share of 33.7% of the total position of Hong Kong's inward DI at end 2013.
The mainland of China (the Mainland) was the second largest source of investment, accounting for 31.9% of the total position of Hong Kong's inward DI at end 2013. The Mainland's investment in Hong Kong covered a wide range of economic activities, including banking; construction; import/export, wholesale and retail trades; and investment and holding, real estate, professional and business services.
Analysed by major economic activity of Hong Kong enterprise groups (HKEGs) which had received inward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 68.2% of the total position of Hong Kong's inward DI at end 2013. This was followed by banking, at 11.8%; and import/export, wholesale and retail trades, at 10.0%.
At the end of 2013, the position of Hong Kong's DI assets increased by 6.2% over a year earlier to $10,483.5 billion. Its ratio to GDP was 493% in 2013. The increase in the position of DI assets in 2013 was mainly attributable to the positive DI outflow from HKEGs to enterprises outside Hong Kong during the year.
Analysed by immediate destination of investment, the Mainland was the most important destination for Hong Kong's outward DI, with a share of 41.1% of the total position of Hong Kong's outward DI at end 2013. Guangdong Province remained a popular location for Hong Kong's investment in the Mainland, accounting for 29.7% (or $1,172.0 billion) of the total position of Hong Kong's outward DI in the Mainland. The most common economic activities undertaken by Hong Kong's direct investment enterprises in the Mainland were import/export, wholesale and retail trades; information and communications; investment and holding, real estate, professional and business services; and manufacturing.
The BVI was the second largest destination of investment, accounting for 39.1% of the total position of Hong Kong's outward DI at end 2013.
Analysed by major economic activity of HKEGs which had made outward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 79.4% of the total position of Hong Kong's outward DI at end 2013. This was followed by import/export, wholesale and retail trades, at 6.2%; and banking, at 3.6%.
Flows of DI
In 2013, total DI inflow amounted to $596.1 billion, larger than that of $580.9 billion in 2012. On the other hand, total DI outflow in 2013 amounted to $646.3 billion, smaller than that of $683.5 billion in 2012. Taking the inflow and outflow together, a net DI outflow of $50.3 billion was recorded in 2013.
Analysed by immediate source of inward DI, the BVI was the major source of Hong Kong's DI inflow in 2013, amounting to $341.9 billion. The Mainland came next, at $46.6 billion. Analysed by major economic activity of HKEGs which had received DI inflow, those engaged in investment and holding, real estate, professional and business services attracted the largest amount of DI inflow in 2013, at $358.0 billion.
Analysed by immediate destination of outward DI, the Mainland accounted for a predominant share of Hong Kong's DI outflow in 2013, at $396.9 billion. Analysed by major economic activity of HKEGs which had made DI outflow, those engaged in investment and holding, real estate, professional and business services took up the largest amount of DI outflow, at $484.9 billion.
Commentary
A Government spokesman said that positions of direct investment liabilities and assets at end 2013 increased further over a year earlier, with direct investment inflow resuming growth, reflecting the relative improvement in global investment climate after the acute risks of the European debt crisis and US fiscal cliff subsided. The positions of direct investment liabilities and assets remained large relative to the size of the economy, reaching 534% and 493% of Hong Kong's GDP respectively. This is a manifestation of Hong Kong's competitive strength as an international financial and business centre.
The spokesman noted that the Mainland continued to feature prominently in Hong Kong's external direct investment, both as a source and as a destination, accentuating Hong Kong as an ideal platform for both Mainland companies to go global and large multinationals to expand their business in the Mainland. Looking ahead, investment activities between the Mainland and Hong Kong should continue to grow amid the deepening economic reforms of the Mainland economy, strengthening economic integration between the two places and further development of offshore Renminbi business in Hong Kong. The Government will continue to enhance our competitiveness and proactively foster linkages with our economic partners.
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 conducted by the C&SD, supplemented by data from other sources.
According to the latest international statistical standards stipulated in the Sixth Edition of the Balance of Payments and International Investment Position Manual released by the International Monetary Fund and the Fourth Edition of Benchmark Definition of Foreign Direct Investment published by the Organisation for Economic Co-operation and Development, the aggregate DI figures (including DI assets and DI liabilities) presented above are compiled based on the "asset/liability principle", while detailed DI figures analysed by country/territory and by major economic activity of HKEGs presented above are based on the "directional principle". Owing to the adoption of different presentation principles, the aggregate DI figures are different from the overall totals of the detailed DI figures by country/territory or by major economic activity of HKEGs. However, the overall direct investment balance compiled from figures based on these two presentation principles respectively is the same.
Tables 1 and 2 show the positions and flows of inward DI in Hong Kong by selected major investor country/territory and by major economic activity of HKEGs respectively for 2012 and 2013. Similar statistics on outward DI from Hong Kong by selected major recipient country/territory and by major economic activity of HKEGs for 2012 and 2013 are presented in Tables 3 and 4.
Further details of DI statistics for 2013 are published in the report External Direct Investment Statistics of Hong Kong 2013. 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/Thursday, December 11, 2014
Issued at HKT 16:30
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