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COMMERCE AND INDUSTRY

In addition to being a net exporter of services in overall terms, analysed by component of services trade, in 2003 Hong Kong recorded a surplus in merchanting and other trade-related services (US$15 billion), transportation services (US$6.8 billion) and financial services (US$2 billion).

External Investment

Hong Kong's attractiveness as a place to do business is reflected by two major indicators, namely the inflow of foreign direct investment (FDI), and the number of foreign-owned regional headquarters and regional offices of companies incorporated outside Hong Kong.

A Census and Statistics Department survey shows that Hong Kong's FDI inflow in 2002 amounted to US$9.7 billion. According to the 'World Investment Report 2003' released by the United Nations Conference on Trade and Development, Hong Kong was the second largest recipient of FDI in Asia in 2002.

Hong Kong had 8 978 enterprise groups with inward direct investment at the end of 2002, comprising 380 in the manufacturing sector and 8 598 in the non- manufacturing sectors. The market value of the stock of inward direct investments amounted to $2,622.3 billion. Chart 3 shows the major economic activities of these enterprise groups while Chart 4 shows source countries/territories of the inward direct investments. Regarding employment, more than 69 per cent of them were enterprise groups employing fewer than 20 persons (Chart 5).

Chart 3: Position of Inward Direct Investment in Hong Kong at Market Value by Major Economic Activity of Hong Kong Enterprise Group at end-2002

Others activities 15.7% ($411.8 billion)

Insurance

3.3% ($85.9 billion)

Financial institutions other than

banks and deposit-taking

companies

3.5% ($90.7 billion)

Banks and deposit-taking

companies

12.4% ($325.4 billion)

Wholesale, retail and import/export trades 13.0% ($341.4 billion)

Investment holding, real estate

and various business services 52.1% ($1,367.0 billion)

An enterprise group may consist of a parent company, its subsidiaries, associates and branches.

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