Hong Kong stood as a net creditor, with net external financial assets amounting to $2.6 trillion at end-2002, corresponding to 210% of last year's GDP.

Hong Kong's external financial assets and liabilities amounted to $8 trillion and $5.4 trillion, respectively, at the end of last year.

The ratios of both Hong Kong's external financial assets and liabilities remained substantial at 637% and 427%, respectively.

This shows Hong Kong is a highly externally-oriented economy with considerable cross-territory investment, and is also a major financial centre in the region with considerable cross-territory fund positions.

The net liability position is the result of direct investment made by non-residents in Hong Kong which was greater than that made by Hong Kong residents abroad.

Hong Kong's external financial assets amounted to $8 trillion at the end of 2002. Most of the assets were held by the banks in the form of inter-bank deposits and loans, reflecting the role of Hong Kong as an international banking centre in channelling funds to the rest of the world.

Hong Kong's external financial liabilities amounted to $5.4 trillion at the end of 2002, and 49.2% ($2.6 trillion) of this total was in the form of direct investments.

Such a high proportion of direct investment liabilities showed Hong Kong had attracted many non-resident enterprises to set up direct investment companies here.