Hong Kong's international investment position remained strong and sound last year, with net external financial assets amounting to HK$4.2 trillion (US$538 billion), the Census and Statistics Department of the government of Hong Kong Special Administrative Region said on Monday.

The net external financial assets of 2006 accounted for 282 percent of gross domestic product, significantly higher than that of 159 percent in 2001, according to the international investment position statistics issued Monday.

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The city's external financial assets amounted to 15.3 trillion HK dollars last year, with direct investment as the largest component, accounting for 34.9 percent. This was followed by portfolio investment, accounting for 30.1 percent.

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

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

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

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