HONG KONG, Dec. 20(Xinhuanet)-- The market value of Hong Kong's inward direct investment surged 19 percent to 3.52 trillion HK dollars(454.19 billion US dollars) last year over 2003, with the ratio to GDP at 273 percent, Hong Kong's Census& Statistics Department said Tuesday.

Outward direct investment also rose 18.8 percent to 3.13 trillion HK dollars(403.87 billion US dollars) at market value, with the ratio to GDP at 243 percent.

Direct investment inflow surged to 265.1 billion HK dollars(34.21 billion US dollars) while outflow rose sharply to 356.1 billion HK dollars(45.95 billion US dollars), resulting in a net outflow of 91 billion HK dollars(11.74 billion US dollars).

The stocks of inward and outward direct investment in Hong Kong both remained sizable, each amounting to more than two times the size of Hong Kong's GDP. This reflected the importance of Hong Kong as a regional headquarters, a regional business hub, and an international financial center.

The mainland continued to feature distinctly in Hong Kong's external direct investment, both as a source and as a destination, reflecting the city's unique position as a gateway to the vast mainland markets as well as a platform for mainland enterprises to access global markets.

This important strategic role has become more entrenched along with the expansion of the Closer Economic Partnership Arrangement and strengthening of economic co-operation within the Pan-Pearl River Delta region.

According to Hong Kong's external direct investment statistics for 2004, released by the Census& Statistics Department, the British Virgin Islands accounted for 29.2 percent of the total stock of inward direct investment, while Bermuda took up another 7.7 percent.

The mainland was the most important source of inward direct investment here, accounting for 29 percent of the total stock, reflecting the importance of investment from the mainland in Hong Kong.

Other major investor countries and territories included the Netherlands and the United States, respectively accounting for 8.7 percent and 6.9 percent of the total.

Analyzed by economic activity, those engaged in investment holding, real estate and various business services attracted 56.4 percent of the total stock. A significant proportion of such investment was related to funds originated from Hong Kong and re-channelled through tax haven economies back to Hong Kong.

Wholesale, retail and import-export trade also represented a major recipient sector, with a share of 14.7 percent of the total. Banks and deposit-taking companies took up another 13.7 percent.

On outward direct investment, the British Virgin Islands remained the most popular tax haven economy for indirect channeling of direct investment funds, accounting for 44.7 percent of the total stock. Enditem