According to the statistics on Hong Kong innovation activities released today (December 23) by the Census and Statistics Department (C&SD), the gross domestic expenditure on research and development (GERD) of Hong Kong in 2020 amounted to $26,554 million, representing an increase of 1% when compared to the corresponding figure of 2019 ($26,333 million). The GERD as a ratio to the Gross Domestic Product in 2020 was 0.99%. Analysed by performing sector, the expenditure on research and development (R&D) activities performed in the business, higher education and government sectors amounted to $11,044 million, $14,129 million and $1,380 million respectively in 2020. 
 
     R&D activities refer to creative and systematic work undertaken so as to increase the stock of knowledge for devising new and improved products/processes/applications and to improve the existing products/processes/applications. 
 
     More detailed statistics on Hong Kong innovation activities, together with the concepts and methodology, are given in the report "Hong Kong Innovation Activities Statistics 2020". Users can download this report at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1110010&scode=580). The report presents the latest statistics on R&D activities in Hong Kong, with analyses on R&D activities performed in the business, higher education and government sectors. It also contains detailed statistics on innovation activities (including product and business process innovations) in the business sector. 
 
     Enquiries about the statistics on Hong Kong innovation activities can be directed to the Science and Technology Statistics Section of the C&SD (Tel: 3903 7290 or email: stb1@censtatd.gov.hk).

     The Census and Statistics Department (C&SD) announced today (December 23) that the series of Effective Exchange Rate Index (EERI) for the Hong Kong Dollar will be rebased following existing practice. The new series will be published as from January 3, 2022, replacing the existing series of EERI.

     The weights for each currency in the existing series of EERI have been based on the average merchandise trade pattern of Hong Kong from 2009 to 2010. To reflect the more up-to-date situation, the weights in the rebased series are updated based on the average merchandise trade pattern from 2019 to 2020. The weights used in the existing and rebased series are shown in the Annex. The rebased EERI series will include the following 18 currencies, with Macao Pataca, Indonesian Rupiah and South African Rand added:
 

     The rebased series of EERI, with the base period January 2020 as 100 (i.e. using the daily average exchange rate of January 2020 as basis for comparison), will replace the existing series (with the base period January 2010 as 100) as from January 3, 2022. Same as the existing series, the rebased series of EERI will be released on a daily basis except for non-trading days (i.e. public holidays and when banks close for business for reasons such as typhoon).

     In the rebased EERI series, figures dating back to January 2, 2020, are recompiled using the new currency weights, while those for earlier periods are derived based on movements in the old series and using a conversion factor obtained from the values of the two index series in an overlapping period.
 
Further information

     More details on the rebased series of EERI will be provided in a feature article in the January 2022 issue of "Hong Kong Monthly Digest of Statistics" which will be available in mid-January 2022. Users can download the publication at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1010002&scode=460).

     Enquiries on EERI may be directed to the Trade Analysis Section (1) of the C&SD (Tel: 2582 4914).

     The Census and Statistics Department (C&SD) released today (December 23) the preliminary Balance of Payments (BoP) and International Investment Position (IIP) statistics of Hong Kong for the third quarter of 2021. This release also included the preliminary External Debt (ED) statistics of Hong Kong for the same period.

I. Balance of Payments

     Hong Kong recorded a BoP surplus of $27.2 billion (3.7% of GDP) in the third quarter of 2021. Reserve assets correspondingly increased by the same amount. This was against a BoP deficit of $37.6 billion (5.5% of GDP) in the second quarter of 2021.

Current account

     The current account recorded a surplus of $96.7 billion (13.2% of GDP) in the third quarter of 2021. This implies that Hong Kong's savings was greater than its investment, enabling Hong Kong to accumulate external financial assets (such as equity securities or debt securities) as a buffer against global financial volatilities. Compared with the current account surplus of $99.9 billion (14.4% of GDP) in the third quarter of 2020, the decrease in surplus was mainly due to a decrease in the goods surplus, partly offset by an increase in the net inflow of primary income and an increase in the services surplus.

     The goods surplus decreased to $4.2 billion in the third quarter of 2021, compared with $32.7 billion in the same quarter of 2020. Over the same period, the services surplus increased from $24.5 billion to $33.5 billion. The primary income inflow and outflow amounted to $446.8 billion and $383.0 billion respectively, thus yielding a net inflow of $63.8 billion in the third quarter of 2021, compared with a net inflow of $47.5 billion in the same quarter of 2020.

Financial account

     An overall net outflow of financial non-reserve assets amounting to $37.1 billion (5.1% of GDP) was recorded in the third quarter of 2021, compared with an overall net outflow of $125.3 billion (18.5% of GDP) in the second quarter of 2021. The overall net outflow recorded in the third quarter of 2021 was due to a net outflow of portfolio investment, partly offset by net inflows of other investment, direct investment and cash settlement of financial derivatives.

     In the third quarter of 2021, reserve assets increased by $27.2 billion, as against a decrease of $37.6 billion in the second quarter of 2021.

II. International Investment Position

     At the end of the third quarter of 2021, both Hong Kong's external financial assets and liabilities stood at a very high level, amounting to $50,140.2 billion (17.7 times of GDP) and $33,501.2 billion (11.9 times of GDP) respectively, a typical feature of a prominent international financial centre.

     Hong Kong's net external financial assets (i.e. assets minus liabilities) amounted to $16,639.0 billion (5.9 times of GDP) at the end of the third quarter of 2021, compared with $17,708.4 billion (6.4 times of GDP) at the end of the second quarter of 2021. Hong Kong's net external financial assets to GDP ratio is one of the largest in the world, which provides the economy with a strong cushion against sudden external shocks.

III. External Debt

     At the end of the third quarter of 2021, Hong Kong's gross ED amounted to $14,619.1 billion (5.2 times of GDP). Compared with $14,232.8 billion (5.1 times of GDP) at the end of the second quarter of 2021, gross ED increased by $386.3 billion. This was mainly attributable to the increases in ED of the banking sector, debt liabilities in direct investment (intercompany lending) and ED of other sectors.

     As one of the world's major financial centres, Hong Kong has a significant amount of ED held against the local banking sector arising through normal banking businesses. At the end of the third quarter of 2021, 61.1% of Hong Kong's ED was attributable to the banking sector. Other ED mainly consisted of ED of other sectors (23.6%) and debt liabilities in direct investment (intercompany lending) (15.1%).

Further information

     BoP is a statistical statement that systematically summarises, for a specific time period (typically a year or a quarter), the economic transactions of an economy with the rest of the world (i.e. between residents and non-residents).

     IIP is a balance sheet showing the stock of external financial assets and liabilities of an economy at a particular time point. The difference between the external financial assets and liabilities is the net IIP of the economy, which represents either its net claim on or net liability to the rest of the world.

     Gross ED, at a particular time point, is the outstanding amount of those actual current, and not contingent, liabilities that are owed to non-residents by residents of an economy and that require payment of principals and/or interests by the debtors at some time points in the future.

     Table 1 presents Hong Kong's BoP. Table 2 presents the detailed current account, while Table 3 presents the detailed capital and financial account. Table 4 shows Hong Kong's IIP, and Table 5 shows Hong Kong's ED.

     Statistics on BoP, IIP and ED for the third quarter of 2021 are preliminary figures, which are subject to revision upon the availability of more data. With the incorporation of the latest data from surveys and other sources, the statistics on BoP, IIP and ED for 2020 have been revised.

     More details of the statistics of BoP (including seasonally adjusted current account), IIP and ED, together with the conceptual and methodological details, are presented in the publication Balance of Payments, International Investment Position and External Debt Statistics of Hong Kong, Third Quarter 2021 published by the C&SD. Users can download the publication at the website of the C&SD (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1040001&scode=260).

     For enquiries about the BoP, IIP and ED statistics, please contact the Balance of Payments Section of the C&SD (Tel: 3903 6979; fax: 2116 0278; email: bop@censtatd.gov.hk).

     The Centre for Food Safety (CFS) of the Food and Environmental Hygiene Department announced today (December 23) that in view of notifications from the World Organisation for Animal Health (OIE) about outbreaks of highly pathogenic H5N1 avian influenza in Weilheim-Schongau District in the State of Bayern in Germany, ZawierciaÅ„ski District of ÅšlÄ…skie Region and Ostrzeszowski District of Wielkopolskie Region in Poland, and a notification from the Ministry of Agriculture, Nature and Food Quality of the Netherlands about an outbreak of highly pathogenic avian influenza in Limburg Province in the Netherlands, the CFS has instructed the trade to suspend the import of poultry meat and products (including poultry eggs) from the above-mentioned areas with immediate effect to protect public health in Hong Kong.

     A CFS spokesman said that according to the Census and Statistics Department, Hong Kong imported about 430 tonnes of frozen poultry meat and about 800 000 poultry eggs from Germany, about 4 070 tonnes of frozen poultry meat and about 24.82 million poultry eggs from Poland, and about 730 tonnes of frozen poultry meat from the Netherlands in the first nine months of this year.

     "The CFS has contacted the German, Polish and Dutch authorities over the issues and will closely monitor information issued by the OIE and the relevant authorities on the avian influenza outbreaks. Appropriate action will be taken in response to the development of the situation," the spokesman said.

     Hong Kong Customs today (December 23) arrested a male proprietor of a private detective agency who had made false claims in the sale of its people tracing service, in contravention of the Trade Descriptions Ordinance (TDO).

     Customs earlier received information alleging that a private detective agency in Tsim Sha Tsui failed to provide the relevant people tracing service after charging a customer a few thousand dollars' service fee, and did not refund the customer as claimed.

     After investigation, Customs officers today arrested a 37-year-old man suspected to be connected to the case. 

     An investigation is ongoing and the arrested man has been released on bail pending further investigation.

     Customs reminds traders to comply with the requirements of the TDO and consumers to procure services at reputable shops.

     Under the TDO, any trader who applies a false trade description to a service supplied to a consumer commits an offence. The maximum penalty upon conviction is a fine of $500,000 and imprisonment for five years.

     Members of the public may report any suspected violations of the TDO to Customs' 24-hour hotline 2545 6182 or its dedicated crime-reporting email account (crimereport@customs.gov.hk).