ENG-2017 — Page 80

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The Economy

Kong's realised direct investment in Guangdong exceeded US$200 billion in the past couple of years, consistently remaining at above 60 per cent of its total inward direct investment. The substantial direct investment from Hong Kong not only contributed to the Mainland's rapid industrialisation in the past decades, but also facilitated the structural transformation of the Hong Kong economy.

Financial links between Hong Kong and the Mainland have strengthened substantially over the years, thanks to the increasing cross-boundary economic activities and the Central People Government's policy to enhance Hong Kong's position as an international financial centre. As a major funding centre for Mainland enterprises, Hong Kong saw 1,051 Mainland enterprises listed on its stock market as at end-2017. Of these, 55 were listed in 2017, raising $98.5 billion in equity funds, with $365.8 billion in aggregate funds raised from IPOs and secondary financing.

Hong Kong 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 about RMB618 billion as at end-2017. RMB bank lending and outstanding RMB bonds stood at RMB145 billion and RMB212 billion respectively. The value of RMB trade settlements handled by banks in Hong Kong reached RMB3.9 trillion in 2017.

Hong Kong also remained the largest offshore RMB investment product market. At the end of 2017, there were 59 Securities and Futures Commission (SFC)-authorised unlisted funds investing onshore via the RMB Qualified Foreign Institutional Investor (RQFII) Scheme, Stock Connect, Bond Connect and/or Mainland's Interbank Bond Market, with an aggregate net asset value (NAV) of RMB6.8 billion, and 29 SFC-authorised exchange traded funds investing onshore via the same channels with an aggregate NAV of RMB34.1 billion. Financial cooperation between the two places was extended to the bond market through the launch of the Bond Connect in July, enabling Hong Kong to serve as the gateway for overseas investors to enter the Mainland's bond market.

Economic cooperation between the two places has continued to deepen. Two subsidiary agreements under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) were signed in June. The National Development and Reform Commission (NDRC) and the governments of Guangdong, Hong Kong and Macao jointly signed the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area in July, establishing such key cooperation areas as promoting infrastructure connectivity, enhancing market integration, building a global technology and innovation hub, building a system of modern industries through coordinated development, jointly building a quality living circle to provide an ideal place for living, working and travelling, cultivating new strengths in international cooperation, and supporting the establishment of major cooperation platforms. This agreement allows for Hong Kong's active participation in the Guangdong-Hong Kong-Macao Bay Area development in the years to come.

To tap the vast opportunities arising from the nation's Belt and Road Initiative, Hong Kong also signed an arrangement with the NDRC in December, focusing on six key areas: finance and investment; infrastructure and maritime services; economic and trade facilitation; people-to-

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