ENG-2020 — Page 71

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The Economy

number of important sectors, including financial services, legal services, construction, testing and certification, television, motion pictures and tourism.

Hong Kong has always been a principal gateway to and from the Mainland for tourism. However, COVID-19 severely disrupted the flow of people between Hong Kong and the Mainland. In 2020, foreign visitors only made 0.2 million trips through Hong Kong to the Mainland, and the number of trips by Mainland residents to or through Hong Kong also dropped markedly to only 2.7 million. However, Hong Kong still remains the largest external investor in the Mainland. According to the Mainland's statistics, the cumulative value of realised direct investment in the Mainland from Hong Kong exceeds US$1 trillion, more than half of the total.

Reciprocally, Hong Kong is the largest destination 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 position as at end-2019, reflecting Hong Kong's role as a platform for Mainland companies to explore other markets and go global. Based on Hong Kong's statistics, the Mainland is Hong Kong's second largest source of foreign direct investment, accounting for 28 per cent of Hong Kong's total inward direct investment position as at end-2019. Mainland companies maintain a strong presence in Hong Kong as well. As at mid-2020, Mainland companies were operating 1,986 regional headquarters and regional or local offices in Hong Kong, up from 789 a decade ago.

Due to proximity, Guangdong's economic links with Hong Kong are understandably the closest of all the provinces. Based on the Mainland's statistics, the value of realised direct investment in Guangdong from Hong Kong was US$17.2 billion in 2020, accounting for 73 per cent of the province's total inward direct investment in the year.

In 2020, the Hong Kong continued to maintain close liaison with the central ministries and the governments of Guangdong and Macao in taking forward the development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). The Chief Executive led a government delegation to Beijing, Guangzhou and Shenzhen in November for in-depth discussions with the relevant Mainland authorities about policy initiatives that would support Hong Kong's development and enhance the community's confidence in the future. To press ahead with GBA development, the Chief Executive's 2020 Policy Address included measures in areas such as cross-boundary infrastructure development and clearance facilitation, joint development of an international innovation and technology hub, cooperation in modern service industries, education and youth exchanges.

Over the years, financial links between Hong Kong and the Mainland have strengthened substantially, 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 had 1,319 Mainland enterprises listed on its stock market as at end-2020. Of these, 112 were listed in 2020, raising more than $390 billion of funds through IPOS. IPOS and secondary market financing combined raised more than $650 billion in aggregate funds.

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