The Economy | 55
Visible trade between Hong Kong and the Mainland is now 318 times that in 1978, representing a significant growth of 19 per cent per annum in value terms (Chart 7). In 2011, Hong Kong and the Mainland were ranked the world's 10th and second largest trading entities respectively.
The Mainland has long been Hong Kong's largest trading partner, accounting for 48 per cent of Hong Kong's total trade value in 2011. A total of 90 per cent of Hong Kong's re-export trade was related to the Mainland, forming the largest market for and the largest source of Hong Kong's re-exports. Reciprocally, Hong Kong was the Mainland's fourth largest trading partner (after the European Union, the United States and Japan), accounting for about 8 per cent of the Mainland's total trade value in 2011.
Hong Kong is a principal gateway to and from the Mainland for business and tourism. The number of trips made by foreign visitors to the Mainland through Hong Kong rose by a cumulative 36 per cent in the past 10 years, totalling 4.3 million trips in 2011. The number of trips made by Mainland residents to or through Hong Kong rose at an average annual growth rate of 20 per cent, amounting to 28.1 million trips in 2011, which was more than six times the level a decade ago.
Hong Kong continues to be the largest external investor in the Mainland. According to the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in the Mainland reached US$527 billion at end-2011, accounting for about 45 per cent of the total inward direct investment there.
Reciprocally, Hong Kong is the first port of call for the Mainland's outward direct investment. Based on the Mainland's statistics, the Mainland's stock of outward direct investment to Hong Kong accounted for 63 per cent of its total outward direct investment as at the end of 2010, reflecting Hong Kong's role as a platform for Mainland companies to reach out and go global. Likewise, based on Hong Kong's statistics, the Mainland is also Hong Kong's largest source of foreign direct investment. At end-2010, the market value of direct investment from the Mainland to Hong Kong amounted to US$402 billion, accounting for 37 per cent of Hong Kong's total inward direct investment. Mainland companies have also maintained a strong presence in Hong Kong. As at mid-2011, Mainland companies have established 248 regional headquarters or regional offices and 557 local offices in Hong Kong, up from 242 and 160 respectively ten years ago.
Among the provinces in the Mainland, Hong Kong's economic links with Guangdong are the closest. Based on the Mainland's statistics, at the end of 2011, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$170 billion, accounting for 61.7 per cent of its total inward direct investment. Hong Kong's huge direct investment in the Mainland has contributed to the latter's industrialisation, while at the same time, also propelling the rapid structural change in the Hong Kong economy over the past three decades.
Supported by the surge in cross-boundary business activities, financial links. between Hong Kong and the Mainland have strengthened substantially over the years. Hong Kong is a major funding centre for Mainland enterprises. A total of 640