Hong Kong's international investment position remained strong and sound last year, with net external financial assets amounting to $4.2 trillion. That corresponds to 282% of gross domestic product, significantly higher than that of 159% in 2001, 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 $15.3 trillion last year, with direct investment as the largest component, accounting for 34.9%. This was followed by portfolio investment, accounting for 30.1%.

Comparing 2006 with 2005, total external financial assets rose 32.3%, while direct investment grew 46.6% and portfolio investment 36.3%.

Last year saw Hong Kong's external financial liabilities at $11.2 trillion, with 53.5% in the form of direct investment. Compared with 2005, total external financial liabilities surged 36.7%. Direct investment went up 47.4% while portfolio investment rose 47.6%.

The ratios of both Hong Kong's external financial assets and liabilities at in last year to gross domestic product remained substantial, at 1,040% and 759%. This shows Hong Kong is a highly externally-oriented economy with considerable cross-territory investment and also a major financial centre in the region with considerable cross-territory fund positions.

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 2005, the positive net international investment position in 2006 rose $744.7 billion. This was mainly attributable to the increases in the net asset position of portfolio and other investment, which exceeded considerably the surge in direct investment's net liability position.