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Commerce and Industry

Inward Direct Investment

According to the World Investment Report 2019 issued by the United Nations Conference on Trade and Development, Hong Kong was the world's second largest destination for inward direct investment in terms of total stock at the end of 2018. The vast stock of external direct investment in Hong Kong demonstrates its status as an international centre for finance and commerce, and its attractiveness as a base for multinational corporations to manage their investment and business round the world. The Census and Statistics Department report, External Direct Investment Statistics of Hong Kong 2018, indicated Hong Kong's foreign direct investment (FDI) inflow in 2018 amounted to $760.5 billion. At the end of 2018, the total stock of inward direct investment' amounted to $17,120.7 billion. Chart 2 shows selected major investor countries and territories of inward direct investment. The British Virgin Islands was the largest, accounting for 31.9 per cent of the total. Chart 3 shows the major economic activities of Hong Kong enterprise groups2 having received inward direct investment. Those engaged in investment and holding, real estate, and professional and business services took up the largest share, at 69.4 per cent of the total.

A survey covering some 9,000 companies in Hong Kong with parent companies located outside Hong Kong found 4,031 of them had regional headquarters or regional offices here as at June 2019.

Chart 2

Stock of Hong Kong's Inward Direct Investment at Market Value by Selected Major Investor

Country/Territory# at end-2018

Other countries/territories

20% ($3,082.9 billion)

Bermuda

5.3% ($809.4 billion)

United Kingdom

7.8% ($1,206.8 billion)

Cayman Islands

8.1% ($1,250.2 billion)

British Virgin Islands

31.9% ($4,909.8 billion)

The Mainland of China 26.8% ($4,121.6 billion)

Notes: Selected based on the stock of Hong Kong's inward direct investment from individual investor countries/territories in recent years.

(1) Individual percentage shares may not add up to 100 due to

rounding.

1 According to international statistical standards, the total stock and flow of inward direct investment presented in this paragraph is compiled based on the asset/liability principle, while detailed inward direct investment figures analysed by country/territory and by major economic activity of Hong Kong enterprise groups presented in charts 2 and 3 respectively are based on the directional principle. Owing to the adoption of different presentation principles, the total stock of inward direct investment is different from the sum of the detailed inward direct investment figures by country/ territory or by major economic activity of Hong Kong enterprise groups.

2

A Hong Kong enterprise group consists mainly of a Hong Kong parent company and its Hong Kong subsidiaries, associates and branches.

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