THE ECONOMY
of SARS in the region in the first half of the year, these two particular types of trips decreased by 6 per cent and 21 per cent respectively in 2003.
Chart 6
Visible trade between Hong Kong and the Mainland
HK$ Billion
2000
Total trade value (left scale)
— Year-on-year rate of change (right scale)
1500
1000
500
Per cent
40
30
20
10
0
-10
-500
1993 1994 1995 1996 1997 1998
1999 2000 2001 2002 2003
Since the Mainland adopted its economic reform and open door policy in 1978, there has been a rapid expansion in merchandise trade, especially re-export trade, between Hong Kong and the Mainland.
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Moreover, Hong Kong is a major source of external direct investment in the Mainland. The cumulative value of Hong Kong's realised direct investment in the Mainland amounted to US$218 billion at end-September 2003, accounting for about half of the total inward direct investment there. Over the years, there has been a noticeable shift in the composition of Hong Kong's direct investment across the boundary, from industrial processing to a wider spectrum of business ventures, such as hotels and tourist-related facilities, real estate and infrastructure development. Relative to other places in the Mainland, Hong Kong's economic links with Guangdong are the most intimate. At end-2002, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$86 billion, accounting for 69 per cent of its total inward direct investment. According to a survey conducted by the Federation of Hong Kong Industries in December 2003, 11 million Mainland workers were employed directly or indirectly in the Mainland by industrial ventures with Hong Kong interests, of whom 10 million were in Guangdong. This is about 57 times the size of Hong Kong's own manufacturing workforce.
In the opposite direction, there has likewise been a sizeable flow of investment capital from the Mainland to Hong Kong over the past years. By end-2002, the Mainland had invested a total of US$76 billion in Hong Kong, making it the largest source of external direct investment here. Over 2 000 Mainland enterprises currently operate in Hong Kong, with total assets amounting to US$220 billion. Mainland