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"Such data are useful for analytical studies on income growth, external orientation of the economy, relationship between trade in goods and services and direct investment flows, links between the exchange rate and the current and financial accounts, and so on."
BoP statistics are now produced regularly in all industrialised economies and in most economies in the Asia-Pacific region. International organisations and research bodies as well as major credit rating agencies have repeatedly questioned the absence of a complete BoP account for Hong Kong.
Although data of transactions such as investment and transfers may be regarded as rather sensitive, Mr Ho stressed that the collection of such data would be purely for statistical and economic analysis purposes.
Hong Kong's long standing policy of free flow of funds into and out of the territory will not be affected in any way by any statistical operation. Data relating to individual persons, households and establishments will be kept strictly confidential and only aggregate statistical information will be released.
Reporting burden may be another concern. Accordingly, appropriate reporting methods will be worked out by the Census and Statistics Department with prospective respondents to minimise reporting efforts required.
Mr Ho said the experience of the department in the collection of data for compiling GNP estimates indicated that through extensive consultation with relevant parties, respondents' concerns could be dispelled and their co-operation secured.
"The investigatory study will be launched in September and will take about 18 months to complete, incurring about $5.4 million.
"During the study, relevant business organisations in the local business community, including banks, securities dealers and other commercial and industrial establishments, will be fully consulted.
"Based on the study results, the Government will determine the way forward as regards implementation.
"Since it takes considerable time for making the necessary preparations, it is expected that new surveys for collecting the necessary data for completing the BoP account would not be launched earlier than 1998," said Mr Ho, urging all parties selected for consultation to give every co-operation to the investigatory study team.