Hong Kong's Gross Domestic Product (GDP) stood at 348.3 billion HK dollars (44.65 billion U.S .dollars) in the second quarter of this year, up 5.1 percent compare with the same period of last year, the Census & Statistics Department said Monday.
Compared with GDP, the value of Gross National Product (GNP) was smaller by 7.6 billion HK dollars (974.4 million U.S. dollars), representing a net external factor income outflow of the same amount, equivalent to 2.2 percent of GDP.
After netting out the effect of price changes, Hong Kong's GNP grew 1.7 percent in real terms. This was lower than the corresponding rise of 5.2 percent in GDP.
Total factor income inflow to Hong Kong, estimated at 163.8 billion HK dollars (21 billion U.S. dollars) and equivalent to 47. 0 percent of GDP, grew 23.1 percent.
Total factor income outflow, estimated at 171.5 billion Hk dollars (21.99 billion U.S. dollars) and equivalent to 49.2 percent of GDP, also recorded a marked rise of 33.7 percent.
Within total factor income inflow, direct investment income grew 10.6 percent, mainly due to increased earnings of some prominent local enterprises from investment abroad.
Portfolio Investment Income rose 36.5 percent, mainly attributable to the dividend pay-out of a number of newly listed H- shares and the increase in interest income received from holdings of non-resident debt securities during the period.
Other Investment Income grew 46.2 percent, mainly on account of increased interest income from offshore loans and deposits of the local banking sector, which in turn was the combined result of increases in interest rates and external assets of the local banking sector.
The Chinsese mainland continued to be the largest source of Hong Kong's external factor income inflow in the second quarter, accounting for 31.4 percent.
This was followed by the British Virgin Islands with a share of 18 percent, reflecting continued investment income inflow from this tax haven economy where
Hong Kong companies have set up a considerable number of holding companies. Other major sources were the United States and the United Kingdom at 10.1 percent and 6.9 percent.
The Census & Statistics Department said both external factor income inflow and outflow were strong in the second quarter, reflecting on the one hand the higher corporate profitability in
Hong Kong in tandem with strong domestic economic growth in the recent quarters, and the generally positive external economic environment and higher interest incomes from overseas on the other.
The slower growth in GNP than in GDP was largely due to a stronger surge in factor income outflow, in turn signifying the further improved investment returns from
Hong Kong brought about by the robust economic performance.
It pointed out that the size of external factor inflow and outflow relative to GDP has risen in recent years, with each of them at around 45 percent of GDP in the first half of 2006, up from around one-quarter five years ago. The robustness of the external investment activities is clear evidence of Hong Kong's status as an international financial and business center.
