ENG-2015 — Page 69

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The Economy

Central People's Government's goal to restructure economic growth towards domestic consumption, makes the Mainland market a huge business opportunity for Hong Kong's

exporters.

Hong Kong also serves as a principal gateway to and from the Mainland for business and tourism. In 2015, foreign visitors to the Mainland made 3.6 million trips through Hong Kong, while Mainland residents made 45.8 million trips to or through Hong Kong.

Hong Kong remains the largest external investor on the Mainland. According to the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in the Mainland reached US$833 billion as at the end of 2015, accounting for more than half of the total.

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 2014, reflecting Hong Kong's role as a platform for Mainland companies to explore other markets and go global. Meanwhile, based on Hong Kong's statistics, the Mainland is Hong Kong's second largest source of foreign direct investment, accounting for nearly one-third of Hong Kong's total inward direct investment. Mainland companies have also maintained a strong presence in Hong Kong. As at mid-2015, Mainland companies had established a total of 1,091 regional headquarters and regional or local offices in Hong Kong, up from 710 a decade ago.

Due to proximity, Guangdong's economic links with Hong Kong are understandably the closest among all the provinces. Based on the Mainland's statistics, the cumulative value of Hong Kong's realised direct investment in Guangdong was US$239 billion as at end-2015, accounting for 63 per cent of its total inward direct investment. The substantial direct investment from Hong Kong did not only contribute to the Mainland's rapid industrialisation in the past decades, but also facilitated the structural transformation of the Hong Kong economy.

Thanks to the increasing cross-boundary economic activities and the Central People's Government's policy to enhance the position of Hong Kong as an international financial centre, financial links between Hong Kong and the Mainland have strengthened substantially over the years. As a major funding centre for Mainland enterprises, Hong Kong saw 951 Mainland enterprises listed on its stock market as at the end of 2015. Of these, 75 were listed in 2015, raising $242.8 billion in equity funds, with $658.1 billion in aggregate funds raised from IPOs and secondary financing.

Separately, the amount of outstanding RMB bonds issued in Hong Kong was largely steady at RMB368 billion as at the end of the year. The territory continued to possess the world's largest offshore pool of RMB liquidity, with the total amount of RMB customer deposits and outstanding RMB certificates of deposit issued standing at RMB1,010 billion as at the end of 2015. Many aspects of offshore RMB business in Hong Kong attained progress in 2015. The value of RMB trade settlement handled by banks in Hong Kong increased further by 9 per cent to RMB6,833 billion, while the outstanding amount of RMB loans jumped 58 per cent to RMB297 billion as at the year end, both attaining their respective record highs.

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