ENG-2013 — Page 70

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The Economy

cumulative 77 per cent over the past decade. With a population of over 1.3 billion (over 100 million in Guangdong Province alone) and the Central Government's goal to rebalance economic growth towards domestic consumption, the Mainland market provides huge. business potential for Hong Kong's exporters.

Hong Kong is a principal gateway to and from the Mainland for business and tourism. In 2013, foreign visitors to the Mainland made 3.9 million trips through Hong Kong. The number of trips made by Mainland residents to or through Hong Kong grew 17 per cent to 40.7 million in 2013.

Hong Kong continues to be the largest external investor in the Mainland. According to the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in the Mainland reached US$671 billion at the end of 2013, accounting for about 48 per cent of the total inward direct investment there.

Reciprocally, Hong Kong is the first port of call for the Mainland's outward direct investment. Based on the Mainland's statistics, the Mainland's stock of outward direct investment to Hong Kong accounted for 58 per cent of its total outward direct investment as at the end of 2012, reflecting Hong Kong's role as a platform for Mainland companies to reach out and go global. Likewise, based on Hong Kong's statistics, the Mainland is also Hong Kong's largest source of foreign direct investment. At the end of 2012, the market value of direct investment from the Mainland to Hong Kong amounted to US$460 billion, accounting for 37 per cent of Hong Kong's total inward direct investment. Mainland companies have also maintained a strong presence in Hong Kong. As at mid-2013, Mainland companies had established a total of 901 regional headquarters, or regional or local offices in Hong Kong, up from 539 ten years ago.

Amongst the provinces in the Mainland, Guangdong's economic links with Hong Kong are the closest. Based on the Mainland's statistics, at the end of 2013, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$201 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, while at the same time also propelling the rapid structural transformation in the Hong Kong economy over the past three decades.

Financial links between Hong Kong and the Mainland have also strengthened substantially over the years, on the back of the surge in cross-boundary economic activities and the Central Government's policy to enhance the global influence of Hong Kong as an international financial centre. Hong Kong is a major funding centre for Mainland enterprises, and 797 Mainland enterprises were listed on the Hong Kong stock market as at the end of 2013, with 78 of these listed in 2013. Mainland enterprises raised $312.2 billion of equity funds in Hong Kong in 2013. These activities in turn reinforced Hong Kong's position as a major international fund-raising

centre.

Offshore RMB business in Hong Kong developed further in 2013. The value of RMB trade settlement handled by banks in Hong Kong surged by 46 per cent in 2013 to reach RMB3,841 billion, while the amount of RMB customer deposits and outstanding RMB certificates of deposit issued also jumped to a high of RMB1,053 billion as at the end of 2013, representing a 46 per cent increase from a year earlier. RMB financing activities also remained buoyant, with

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