XN000022-1997-03-26 — Page 14

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External investments in HK's non-manufacturing sectors

At the end of 1995, the stock of inward direct investments in the non- manufacturing sectors of Hong Kong totalled $487.3 billion, 6% higher than the amount at the end of 1994, according to the results of the latest round of a survey on external investments in non-manufacturing sectors released today (Wednesday) by the Census and Statistics Department.

Analysed by individual investor country/territory, the United Kingdom was the largest investor country, accounting for 29% ($143.1 billion) of the total at the end of 1995. This was followed by China and Japan, which accounted for 21% ($104.6 billion) and 14% ($69.9 billion) of the total respectively. The United States of America was the fourth largest investor country and accounted for 12% ($58.8 billion) of the total. Taken together, these four investor countries accounted for around 77% of the total value of the stock of inward direct investments in the non-manufacturing sectors of Hong Kong.

On the conceptual aspects, a spokesman for the Census and Statistics Department explained, "Inward direct investments refer to investments in a Hong Kong enterprise by a non-Hong Kong resident investor who has a lasting interest in and an influence over the management of the enterprise. The stock of inward direct investments is a measure of the cumulative amount of funds (including equity capital, reinvested earnings and loan capital, if any) provided by external direct investors."

Analysed by business sector, banks and deposit-taking companies attracted the largest share (40% or $193.6 billion) of the total value of the stock of inward direct investments in the non-manufacturing sectors at the end of 1995.

Inward direct investments through holding companies was another salient feature and these accounted for 22% ($107.4 billion) of the total.

The spokesman cautioned, "The top company of an enterprise is taken as the reporting unit in the survey. Since detailed data on the subsidiaries are not available, the statistics on inward direct investments at sectoral level can only be based on the business activity of the top company. Thus, the present statistics do not necessarily reflect the sectoral distribution of inward direct investments."

The Industry Department has been conducting a similar survey in respect of the manufacturing sector. Based on the findings of these two complementary surveys, the overall total of the stock of inward direct investments in the manufacturing and non- manufacturing sectors taken together amounted to $532.6 billion at the end of 1995, 7% higher than the amount at the end of 1994. The share of the manufacturing sector in the overall total was around 9%.