Hong Kong’s international investment position (IIP) remains strong, with net external financial assets of US$521.88 billion at end-2007, up US$5.25 billion compared to end-2006. The figure corresponds to 252% of GDP in 2007, according to the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR).
At end-2007, Hong Kong’s external financial assets and liabilities amounted to US$2.73 trillion and US$2.20 trillion, respectively.
IIP is a snapshot balance sheet showing the stock of external financial assets and liabilities of an economy. 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.
The ratios of both Hong Kong’s external financial assets and liabilities at end-2007 to GDP remained substantial, at 1,318% and 1,066% respectively, reflecting that Hong Kong is a highly externally oriented economy with considerable cross-territory investment. It is also a major financial center in the region with considerable cross-territory fund positions.
Most of the broad IIP components were in net asset positions at end-2007. The only exception was direct investment — which had a net liability, as the amount of direct investment made by non-residents in Hong Kong was greater than that made by Hong Kong residents abroad.
An HKSAR Government spokesman noted the level of net external financial assets increased slightly from the previous year, while its ratio to GDP decreased to 252% in 2007 from 273% in 2006 amid strong GDP growth.
The spokesman also pointed out that both Hong Kong’s external financial assets and liabilities were enormous, particularly so when expressed as ratios to GDP. This signifies the diverse roles of Hong Kong as an international financial center and as a conduit for channeling investment funds to the Mainland and other parts of the world.
The spokesman further commented that both external financial assets and liabilities, particularly those related to direct and portfolio investment, increased sharply during 2007. This mainly reflects the generally favorable economic environment as well as the buoyant performance in many stock markets during the year.
|
