Hong Kong’s International Investment Position for 2008

For more information, please contact:
Melissa Ng /David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315

June 2, 2009 - The Census and Statistics Department (C&SD) of the Hong Kong Special Administrative Region Government today released the international investment position (IIP) statistics for Hong Kong for the reference year of 2008.

IIP is a balance sheet showing the stock of external financial assets and liabilities of an economy at a particular time point. External financial assets consist of financial claims on non-residents and other financial assets where no debtor is involved (e.g. monetary gold). External financial liabilities refer to financial claims of non-residents on residents of the economy.

In compiling and presenting the IIP statistics, the standards prescribed in the Fifth Edition of the Balance of Payments Manual of the International Monetary Fund are adopted. The summary of the IIP Statistics for 2008 follows:

At end-2008, Hong Kong’s external financial assets and liabilities amounted to HK$17,566.7 billion (US$2,252.14 billion) and HK$12,766.2 billion (US$1,636.69 billion) respectively. After netting out the external financial liabilities from the external financial assets, Hong Kong was a net creditor. Hong Kong’s net external financial assets amounted to HK$4,800.5 billion (US$615.44 billion) at end-2008, corresponding to 286% of GDP in that year.

The ratios of both Hong Kong’s external financial assets and liabilities at end-2008 to GDP in that year remained substantial, at 1,048% and 761% respectively, reflecting that Hong Kong is a highly externally oriented economy and also a major financial center in the region with considerable cross-territory investment.

Most of the broad IIP components were in net asset positions at end-2008, except direct investment (DI). DI was in a net liability position as the amount of DI made by non-residents in Hong Kong was greater than that made by Hong Kong residents abroad.

Compared with end-2007, the net IIP at end-2008 increased by HK$1,026.9 billion (US$131.65 billion). This was mainly attributable to the decrease in the net liability position of DI, and the increases in reserve assets (RA) and in the net asset position of portfolio investment (PI) and financial derivatives (FD) which exceeded the decrease in the net asset position of other investment (OI).

A Government spokesman says that Hong Kong’s international investment position remained sound and strong. With the level of the net external financial assets increased significantly from the previous year, its ratio to GDP rose markedly to 286% in 2008 from 234% in 2007. This was one of the key factors underpinning the resilience of the economy in the face of the global financial crisis.

The spokesman comments further that both Hong Kong’s external financial assets and liabilities were enormous, particularly so when expressed as ratios to GDP. This signified the diverse roles of Hong Kong as an international financial center, and a conduit for channeling investment funds to the Mainland and other parts of the world.