4.
Some industrialised economies have their ratios of GNP to GDP less than 1. These include Australia (0.967), Canada (0.966), France (0.992) and Germany (0.996).
The Commissioner for Census and Statistics, Mr Frederick Ho, explained: "GNP is compiled by adjusting GDP by: (a) adding total income earned by Hong Kong residents from outside Hong Kong, and (b) subtracting total income earned by non-Hong Kong residents from within Hong Kong.
"Total factor income flow to Hong Kong in 1993 amounted to $318.4 billion or 35.4% of GDP, while total factor income outflow in 1993 was $308.5 billion or 34.3% of GDP. Putting these together, there was a net inflow of $9.9 billion."
The vast amounts of inflow and outflow reinforce the belief that Hong Kong, being an international centre for finance, business and trade, has strong economic linkages with the rest of the world.
Of total income earned by Hong Kong residents from outside Hong Kong, direct investment income (DII) accounts for 25.4% (or $81 billion), portfolio investment income (PII) for 21.6% (or $68.8 billion), other investment income (OII) for 52.9% (or $168.5 billion) and compensation of employees (CE) for 0.03%.
Of total factor income outflow to non-residents of Hong Kong, DII accounts for 49.9% (or $154 billion), PII for 3.6% (or $11.2 billion), Oll for 46.4% (or $143.2 billion) and CE for 0.03%
The total amount of DII outflow of Hong Kong ($154 billion) ranks very high in the world. This is partly attributed to the fact that external investors have accumulated a huge amount of investment in Hong Kong through their operation for a long time in the past.
On the other hand, the total amount of DII inflow ($81 billion) is also huge, indicating that Hong Kong investors have made substantial investments in other economies in recent years.
The total value of PII inflow ($68.8 billion) is about six times that of PII outflow, reflecting that Hong Kong investors invest in overseas securities much more than non-resident investors in resident securities. The banking sector is the dominant contributor to OII, with substantial interest flows generated from banks' external assets and liabilities which mainly consist of interbank placement of funds.