Hong Kong Economic and Trade Office, USA
Hong Kong
News Release



External direct investment of Hong Kong in 2018

 



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December 12, 2019 - Hong Kong’s external direct investment (DI) statistics for 2018 were released today by the Census and Statistics Department of the Hong Kong Special Administrative Region Government.

Stocks of DI
At the end of 2018, the total stock of Hong Kong’s inward DI (i.e. the position of Hong Kong’ DI liabilities) increased by 1.0% over a year earlier to HK$17,120.7 billion (US$2,194.9 billion). Its ratio to the Gross Domestic Product (GDP) stood at 602% in 2018. The increase in 2018 was mainly attributable to the positive DI inflow to Hong Kong during the year.

As for the total stock of Hong Kong’s outward DI (i.e. the position of Hong Kong's DI assets), it increased by 0.9% over a year earlier to HK$16,071.3 billion (US$2,060.4 billion). Its ratio to GDP was 565% in 2018. The increase in 2018 was mainly attributable to the positive outflow of DI to enterprises outside Hong Kong during the year.

Analyzed 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 31.9% and 26.8% respectively at end-2018. Analyzed 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 69.4% at end-2018. This was followed by banking, at 11.8%; and import/export, wholesale and retail trades, at 9.0%.

Analyzed 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 40.6% and 33.8% respectively at end-2018. Analyzed 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 80.4% at end-2018. This was followed by import/export, wholesale and retail trades, at 7.4%; and banking, at 2.8%.

Flows of DI
In 2018, total DI inflow amounted to HK$760.5 billion (US$97.5 billion), smaller than that of HK$979.6 billion (US$125.5 billion) in 2017. On the other hand, total DI outflow in 2018 amounted to HK$587.7 billion (US$75.3 billion), smaller than that of HK$792.7 billion (US$101.6 billion) in 2017. Taking the inflow and outflow together, a net DI inflow of HK$172.8 billion (US$22.1 billion) was recorded in 2018.

Analyzed by immediate source of investment, the Mainland was the major source of Hong Kong’s DI inflow in 2018, amounting to HK$296.6 billion (US$38 billion). The BVI came next, at HK$281.1 billion (US$36 billion). Analyzed 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 2018, at HK$479.7 billion (US$61.5 billion).

Analyzed by immediate destination of investment, the Mainland accounted for a predominant share of Hong Kong's DI outflow in 2018, at HK$397.0 billion (US$50.8 billion). The BVI came next, at HK$199.3 billion (US$25.5 billion). Analyzed 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 HK$472.6 billion (US$60.5 billion).

Commentary
A Government spokesman said that the stocks of overall inward and outward DI continued to rise in 2018 and reached HK$17,120.7 billion (US$2,194.9 billion) and HK$16,071.3 billion (US$2,060.4 billion) [602% and 565% of GDP] respectively at end-2018, notwithstanding the increasingly uncertain global economic and financial environment in the latter part of the year. According to the World Investment Report 2019 issued by the United Nations Conference on Trade and Development, Hong Kong is the world’s second largest destination for inward DI and fourth largest source of outward DI. The vast stock of external DI in Hong Kong reveals our status as an international centre for finance and commerce, as well as our attractiveness as a base for multinational corporations to manage their investment and business in the international arena.

The spokesman noted that Hong Kong's DI covers a large geographical spread and a wide range of economic activities, with the Mainland featured prominently both as a source and as a destination. To further Hong Kong's development as an international financial and business center, the Government will strive to enhance our established competitive advantages, explore new areas of strength, and capitalize on the vast opportunities arising from the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the national Belt and Road Initiative.

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