3
The Economy
Guangdong Province alone) and the Central Government's goal to rebalance economic growth towards domestic consumption, the Mainland market provides huge business potential for Hong Kong's exporters.
Hong Kong is a principal gateway to and from the Mainland for business and tourism. In 2012, foreign visitors to the Mainland made 4.1 million trips through Hong Kong. The number of trips made by Mainland residents to or through Hong Kong reached 34.9 million in 2012, with an average annual growth rate of 18 per cent.
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$592 billion at the end of 2012, accounting for about 46 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 62 per cent of its total outward direct investment as at the end of 2011, 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 the end of 2011, the market value of direct investment from the Mainland to Hong Kong amounted to US$392 billion, accounting for 36 per cent of Hong Kong's total inward direct investment. Mainland companies have also maintained a strong presence in Hong Kong. As at mid-2012, Mainland companies had established a total of 853 regional headquarters, or regional or local offices in Hong Kong, up from 556 ten years ago.
Amongst the provinces in the Mainland, Guangdong's economic links with Hong Kong are the closest. Based on the Mainland's statistics, at the end of 2012, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$185 billion, accounting for 62 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 transformation in the Hong Kong economy over the past three decades.
Financial links between Hong Kong and the Mainland have also strengthened substantially over the years, on the back of the surge in cross-boundary business activities and the Central Government's policy to enhance the global influence of Hong Kong as an international financial centre. Hong Kong is a major funding centre for Mainland enterprises, and 721 Mainland enterprises were listed on the Hong Kong stock market as at the end of 2012, with 45 of these listed in 2012. Mainland enterprises raised $215.7 billion of equity funds in Hong Kong in 2012. These activities in turn reinforced Hong Kong's position as a major fund-raising centre in the region.
With the Mainland's staunch support for Hong Kong's development as the nation's premier offshore renminbi (RMB) centre, RMB business in Hong Kong continued to see appreciable growth in 2012. Total RMB trade settlements handled by banks in Hong Kong amounted to RMB 2,632.5 billion in 2012, a 37 per cent growth compared with 2011. At the end of 2012, the outstanding amount of RMB customer deposits and certificates of deposit issued amounted to RMB 603 billion and RMB 117.3 billion respectively, totalling RMB 720.2 billion, up 9 per cent
43