ENG-2012 — Page 72

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The Economy

compared with RMB 661.6 billion at the end of 2011. Since August 2012, authorised institutions in Hong Kong have been allowed to offer RMB services to personal customers who are non- Hong Kong residents. Over 29,000 accounts were opened by non-resident personal customers by the end of 2012, with deposits exceeding RMB 4 billion. RMB bank lending also expanded significantly in 2012, with outstanding RMB loans amounting to RMB 79 billion at the end of 2012, a 157 per cent growth from a year earlier. Hong Kong is the first place outside the Mainland to develop an RMB bond market. By the end of 2012, there had been 220 RMB bond issuances with total outstanding amount of about RMB 237.2 billion.

Besides RMB bonds, a wide range of RMB investment products were launched in Hong Kong in 2012, including an RMB gold exchange-traded fund (ETF), an RQFII A-share ETF, RMB currency futures, shares traded in both RMB and HKD and RQFII A-share ETF derivative warrants.

In June 2012, the Central Government announced a series of measures to boost Hong Kong's role as an offshore RMB centre and global financial centre. These included developing the offshore RMB lending market and enriching the variety of offshore RMB products in Hong Kong, increasing the investment quotas, enlarging the range of participating entities, enriching the product variety and relaxing the investment restrictions in relation to the RMB Qualified Foreign Institutional Investors (RQFII) scheme. These measures will broaden the scope of the offshore RMB market in Hong Kong and expand the channels for the flow and circulation of RMB funds between Hong Kong and the Mainland.

Economic co-operation and integration with the Mainland has been continuously enhanced through the broadening of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). In June 2012, the Hong Kong Special Administrative Region (HKSAR) Government and the Central People's Government signed Supplement IX to CEPA, providing 43 services liberalisation and trade and investment facilitation measures, including 37 liberalisation measures in 22 service sectors, measures to strengthen co-operation in finance and trade and investment facilitation, and measures to promote the mutual recognition of professional qualifications. Inclusive of the measures in Supplement IX, there is now preferential treatment for Hong Kong service providers entering the Mainland market in 48 service sectors. The new measures will help Hong Kong service industries take advantage of the Mainland market's potential and assist integration and professional exchanges.

Construction of the Hong Kong Link Road for the Hong Kong-Zhuhai-Macao Bridge started in May 2012. When completed in 2016, the bridge will significantly reduce commuting time and transportation costs between Hong Kong and the western Pearl River Delta (PRD) region and help the flow of people and goods within the PRD generally.

The Economy in 2012

External trade

The difficult and unsteady global trading environment continued to take its toll on Hong Kong's external trade in 2012. Total exports of goods slowed further to a small growth of 1.3 per cent in real terms in 2012, from the already moderate 3.4 per cent increase in 2011. The European Union (EU) market remained the weakest spot for Hong Kong's exports in 2012, as the eurozone

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