XN000022-1995-12-06 — Page 37

- 35 -

(**) As from 1996, the preliminary GNP estimates will be released within 15 months from the reference year

(b) GNP is a measure of the total income of residents of a country or territory in a specified period, irrespective of whether the income is earned from investment and employment within the domestic boundary of that country or territory, or outside.

On the other hand, GDP is an aggregate measure of the total value of net output produced within the domestic boundary of a country or territory in a specified period. Since production is rewarded by income, GDP also measures the total income arising from such current production, irrespective of whether the factors (i.e. labour and capital) for producing the goods or providing the services are owned by residents or non-residents.

Hence, GNP is compiled by adjusting GDP by: (i) adding total income earned by Hong Kong residents from outside Hong Kong, and (ii) subtracting total income earned by non-Hong Kong residents from within Hong Kong.

GNP emphasises the composition of aggregate income of Hong Kong residents, while GDP emphasised the composition of aggregate production. They are both useful data, complementary to each other in supporting economic analyses.

Based on the preliminary estimates of GNP, the total inflow of external factor income in 1993 was HK$318.4 billion, while the total outflow was HK$308.5 billion. This resulted in a net income inflow of HK$9.9 billion. Combining the net income inflow with the latest revised GDP estimate for 1993 of HK$899.9 billion, the preliminary estimate of GNP for 1993 is therefore HK$909.8 billion. Given the highly externally-oriented structure of the Hong Kong economy, such substantial external income flows are not unexpected. However, with only a small net income flow, the value of GNP in 1993 was only 1.1% above that of GDP.

End