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The Economy
Hong Kong also serves as a principal gateway to and from the Mainland for business and tourism. In 2016, foreign visitors to the Mainland made 3.5 million trips through Hong Kong, while Mainland residents made 42.8 million trips to or through Hong Kong.
Hong Kong remains the largest external investor on the Mainland. According to the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment on the Mainland reached US$915 billion as at the end of 2016, accounting for more than half of the total.
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 60 per cent of its total outward direct investment as at the end of 2015, reflecting Hong Kong's role as a platform for Mainland companies to explore other markets and go global. Based on Hong Kong's statistics, the Mainland is Hong Kong's second largest source of foreign direct investment, accounting for 27 per cent of Hong Kong's total inward direct investment. Mainland companies also maintain a strong presence in Hong Kong. As at mid-2016, Mainland companies had established 1,123 regional headquarters and regional or local offices in Hong Kong, up from 717 a decade ago.
Due to proximity, Guangdong's economic links with Hong Kong are understandably the closest among all the provinces. Based on the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$256 billion as at end-2016, accounting for 64 per cent of its total inward direct investment. The substantial direct investment from Hong Kong not only contributed to the Mainland's rapid industrialisation in the past decades, but also facilitated the structural transformation of the Hong Kong economy.
Financial links between Hong Kong and the Mainland have strengthened substantially over the years, thanks to the increasing cross-boundary economic activities and the CPG's policy to enhance Hong Kong's position as an international financial centre. As a major funding centre for Mainland enterprises, Hong Kong saw 1,002 Mainland enterprises listed on its stock market as at the end of 2016. Of these, 57 were listed in 2016, raising $182.9 billion in equity funds, with $348.4 billion in aggregate funds raised from IPOS and secondary financing.
Hong Kong continued to possess the world's largest offshore pool of RMB liquidity, with the total amount of RMB customer deposits and outstanding RMB certificates of deposit issued standing at RMB625 billion as at the end of 2016. During the year, RMB bank lending held largely steady at RMB295 billion while RMB bond issuance moderated to RMB52.8 billion. The value of RMB trade settlements handled by banks in Hong Kong reached RMB4,542 billion.
Hong Kong also remained the largest offshore RMB investment product market. At the end of 2016, there were 68 Securities and Futures Commission (SFC)-authorised unlisted funds investing onshore via the RMB Qualified Foreign Institutional Investor (RQFII) Scheme, Stock Connect and/or China's Interbank Bond Market, with an aggregate net asset value (NAV) of RMB10 billion, and 26 SFC-authorised RQFII/Stock Connect exchange traded funds adopted dual trading counters in RMB and HKD with an aggregate NAV of RMB28.9 billion. Following the launch of the Shanghai-Hong Kong Stock Connect in November 2014, the launch of the
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