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Hong Kong's external direct investment (DI) statistics for 2012 were released today (December 10) by the Census and Statistics Department (C&SD).
Positions of DI
At the end of 2012, the position of Hong Kong's DI liabilities increased by 14.2% from a year earlier to $10,509.0 billion. Its ratio to GDP stood at 515% in 2012. The increase in the position of Hong Kong's DI liabilities in 2012 was mainly attributable to the rise in the total market values of Hong Kong enterprise groups (HKEGs) that had received DI from abroad 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 (37.0%) of the total position of inward DI at end 2012, reflecting the importance of the Mainland's investment 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 32.7% and 7.0% respectively of the total position of Hong Kong's inward DI at end 2012.
Analysed by major economic activity of HKEGs which had received inward DI, those engaged in investment and holding, real estate, professional and business services took up the largest share, at 68.7% of the total position at end 2012. This was followed by banking, at 11.6%; and import/export, wholesale and retail trades, at 9.2%.
At the end of 2012, the position of Hong Kong's DI assets increased by 12.6% from a year earlier to $9,872.6 billion. Its ratio to GDP was 483% in 2012. The increase in the position of DI assets was mainly attributable to the positive DI outflow from HKEGs to enterprises outside Hong Kong and the increase in the total market values of non-resident enterprises that had received DI from 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 43.4% of the total position of Hong Kong's outward DI at end 2012.
The Mainland was the second largest destination of investment, accounting for 40.7% of the total position at end 2012. Guangdong Province remained a popular location for Hong Kong's investment in the Mainland, accounting for 32.4% (or $1,190.0 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 information and communications; investment and holding, real estate, professional and business services; and manufacturing.
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 78.0% of the total position at end 2012. This was followed by import/export, wholesale and retail trades, at 6.0%; and banking, at 3.8%.
Flows of DI
In 2012, total DI inflow amounted to $580.9 billion, smaller than that of $748.2 billion in 2011. On the other hand, total DI outflow in 2012 amounted to $683.5 billion, smaller than that of $746.4 billion in 2011. Taking the inflow and outflow together, a net DI outflow of $102.6 billion was recorded in 2012.
Analysed by immediate source of inward DI, the Mainland was the major source of Hong Kong's DI inflow in 2012, amounting to $232.7 billion. The BVI came next, at $191.9 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 the total DI inflow in 2012, at $441.9 billion.
Analysed by immediate destination of outward DI, the Mainland accounted for a predominant part of Hong Kong's DI outflow in 2012, at $296.6 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 the total DI outflow, at $536.6 billion.
Commentary
A Government spokesman said that the positions of direct investment liabilities and assets at end-2012 increased notably further from a year earlier, despite an unsteady external environment during 2012. The positions of direct investment liabilities and assets remained large relative to the size of the economy, rising to 515% and 483% of GDP respectively. This is a 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 as a destination, covering a wide range of economic activities. Looking ahead, investment activities between the Mainland and Hong Kong should continue to grow amid the strengthening economic co-operation between the two places and the further development of offshore Renminbi business in Hong Kong. The Government will also proactively foster economic linkages with the 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 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 presented above are based on the "asset/liability principle", while detailed DI figures analysed by country/territory and by major economic activity 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. 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 major investor country/territory and by major economic activity of HKEGs respectively for 2011 and 2012. Similar statistics on outward DI from Hong Kong by major recipient country/territory and by major economic activity of HKEGs for 2011 and 2012 are presented in Tables 3 and 4.
Further details of DI statistics for 2012 are published in the report External Direct Investment Statistics of Hong Kong 2012. 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/Tuesday, December 10, 2013
Issued at HKT 16:30
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