External direct investment of Hong Kong in 2019
Stocks of DI
At the end of 2019, the total stock of Hong Kong's inward DI (i.e. the position of Hong Kong's DI liabilities) decreased by 5.5% over a year earlier to $16,186.9 billion. Its ratio to the Gross Domestic Product (GDP) stood at 565% in 2019. As for the total stock of Hong Kong's outward DI (i.e. the position of Hong Kong's DI assets), it decreased by 2.3% over a year earlier to $15,694.4 billion. Its ratio to GDP was 548% in 2019. The decreases in the total stocks of Hong Kong's inward DI and outward DI at the end of 2019 were mainly attributable to some significant corporate restructuring activities taking place in that year.
Analysed by immediate source of investment, the British Virgin Islands (BVI) and the mainland of China (the Mainland) were the two largest sources for Hong Kong's inward DI, with a share of 33.9% and 28.1% respectively at end-2019. 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 65.7% at end-2019. This was followed by banking, at 12.9%; and import/export, wholesale and retail trades, at 10.7%.
Analysed by immediate destination of investment, the Mainland and the BVI were the two largest destinations for Hong Kong's outward DI, with a share of 44.7% and 34.8% respectively at end-2019. 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 77.6% at end-2019. This was followed by import/export, wholesale and retail trades, at 8.6%; and banking, at 3.1%.
Flows of DI
In 2019, total DI inflow amounted to $456.7 billion, smaller than that of $760.5 billion in 2018. On the other hand, total DI outflow in 2019 amounted to $295.9 billion, smaller than that of $587.7 billion in 2018. Taking the inflow and outflow together, a net DI inflow of $160.7 billion was recorded in 2019.
Analysed by immediate source of investment, the Mainland was the major source of Hong Kong's DI inflow in 2019, amounting to $320.5 billion. The BVI came next, at $259.1 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 in 2019, at $235.8 billion.
Analysed by immediate destination of investment, the Mainland accounted for a predominant share of Hong Kong's DI outflow in 2019, at $411.0 billion. The BVI came next, at $132.0 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, at $236.9 billion.
A government spokesman said that Hong Kong's stock of external DI fell moderately in 2019, due to some major corporate restructuring exercises. Nonetheless, the stocks of overall inward and outward DI remained substantial at $16,186.9 billion and $15,694.4 billion (565% and 548% of GDP) respectively at end-2019, making Hong Kong the world's third largest destination and sixth largest source of external DI. The vast stock of external DI in Hong Kong testifies our status as an international financial centre and commercial hub, as well as our attractiveness as a base for multinational corporations to manage their investments and businesses around the world.
The spokesman noted that Hong Kong's DI covers a large geographical spread and a wide range of economic activities, with the Mainland featuring prominently both as a source and as a destination. To further Hong Kong's development as an international financial and business centre, the Government will strive to enhance our established competitive advantages, explore new areas of strength, and capitalise on the ample opportunities arising from the National 14th Five-Year Plan, the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative so as to better integrate into the country's overall development.
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.
According to the international statistical standards, the total stocks and flows of DI 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 are based on the "directional principle". Owing to the adoption of different presentation principles, the total stocks and flows of DI are different from the sums 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 (i.e. stocks) and flows of inward DI in Hong Kong by selected major investor country/territory and by major economic activity of HKEGs respectively for 2018 and 2019. Similar statistics on outward DI from Hong Kong are presented in Tables 3 and 4.
More detailed statistics for 2019 are given in the report External Direct Investment Statistics of Hong Kong 2019. Users can download this publication 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 3903 7024.
Ends/Friday, December 11, 2020
Issued at HKT 16:30
Issued at HKT 16:30