Hong Kong's international investment position remained sound and strong last year, with net external financial assets amounting to $5.768 trillion. That corresponds to 353% of gross domestic product, significantly higher than that of 288% in 2008, the Census & Statistics Department says.

According to the international investment position statistics rolled out today, Hong Kong stood as a net creditor last year. The city's external financial assets amounted to $19.81 trillion, with direct investment as the largest component, accounting for 32.6%. This was followed by portfolio investment, accounting for 31.7%.

Total external financial assets rose 13.1% in 2009 compared with 2008, while direct investment grew 9.5% and portfolio investment 45.6%.

Last year, Hong Kong's external financial liabilities stood at $14.04 trillion, with 50.4% in the form of direct investment. Compared with 2008, total external financial liabilities rose 10.6%. Direct investment went up 11.8% while portfolio investment surged 46.5%.

At the end of 2009, the ratios of both Hong Kong's external financial assets and liabilities to gross domestic product remained substantial, at 1,213% and 860%. This shows Hong Kong is a highly externally oriented economy and also a major financial centre in the region with considerable cross-territory investment.

Financial hub

Both Hong Kong's external financial assets and liabilities were enormous, particularly so when expressed as ratios to gross domestic product. This signified the diverse roles of Hong Kong as an international financial centre, and a conduit for channelling investment funds to the Mainland and other parts of the world.

Most of the broad international investment position components were in net asset positions, except direct investment with a net liability position, as the amount of direct investment made by non-residents in Hong Kong was greater than that made by Hong Kong residents abroad.

Compared with 2008, the net international investment position in 2009 rose $941.5 billion. This was mainly attributable to the increases in the net asset position of portfolio investment and in reserve assets, which exceeded the surge in direct investment's net liability position and drops in net asset positions of financial derivatives and other investment.