ENG-2010 — Page 93

Chart 7

Visible Trade between Hong Kong and the Mainland

HK$ Billion

1,000

Total trade value (left scale)

900

Year-on-year rate of change (right scale)

800

700

600

500

400

300

200

100

0

Per cent

35

30

|יזיזי

25

20

15

10

5

0

-5

-10

-15

-20

-25

The Economy | 51

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2006 | 2007

2008

2009

2010

There has been a notable expansion in merchandise trade between Hong Kong and the Mainland, except for 2009 with the impact of the global financial tsunami.

Hong Kong is also a principal gateway to and from the Mainland for business and tourism. The number of trips made by foreign visitors to the Mainland through Hong Kong rose by a cumulative 42 per cent in the past 10 years, or at an average annual growth rate of 3.6 per cent, reaching 4.3 million trips in 2010. Correspondingly, the number of trips made by Mainland residents to or through Hong Kong rose by nearly five times over the decade, at an average annual growth rate of 20 per cent, to 22.7 million trips in 2010.

Hong Kong continues to be the Mainland's largest source of foreign direct investment. According to the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in the Mainland reached US$456 billion at end- 2010, accounting for 42 per cent of the total inward direct investment there. Over the years, the composition of Hong Kong's direct investment in the Mainland has shifted gradually from industrial processing to a wider spectrum of business ventures such as hotels and tourist-related services, real estate, retail trade, infrastructure construction, and various business and communications services.

Hong Kong has closer economic links with Guangdong than other places on the Mainland. By the end of 2010, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$156 billion, accounting for 62 per cent of its total inward direct investment.

Hong Kong's huge direct investment in the Mainland has contributed to the latter's industrialisation and, at the same time, facilitated the rapid structural change in the Hong Kong economy.