Hong Kong Reports Q3 2025 Balance of Payments Deficit and Strong International Investment Position Statistics

Hong Kong's Balance of Payments and International Investment Position statistics for third quarter of 2025

The Census and Statistics Department (C&SD) released today (December 22) the preliminary Balance of Payments (BoP) and International Investment Position (IIP) statistics of Hong Kong for the third quarter of 2025. 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 deficit of $136.5 billion (16.0% of Gross Domestic Product (GDP)) in the third quarter of 2025. Reserve assets correspondingly decreased by the same amount. This was against a BoP surplus of $105.5 billion (13.4% of GDP) in the second quarter of 2025.

Current account

The current account recorded a surplus of $98.2 billion (11.5% of GDP) in the third quarter of 2025. This reflects 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 $113.2 billion (13.9% of GDP) in the third quarter of 2024, the decrease in surplus was mainly due to the decrease in net inflow of primary income, partly offset by the increase in services surplus.

The goods account recorded a surplus of $1.5 billion in the third quarter of 2025, as against a deficit of $0.6 billion in the same quarter of 2024. Over the same period, the services surplus increased from $38.8 billion to $48.1 billion. The primary income inflow and outflow amounted to $576.1 billion and $521.5 billion respectively, thus yielding a net inflow of $54.5 billion in the third quarter of 2025, compared with a net inflow of $80.3 billion in the same quarter of 2024.

Financial account

An overall increase in financial non-reserve assets amounting to $271.0 billion (31.7% of GDP) was recorded in the third quarter of 2025, compared with an overall increase of $21.1 billion (2.7% of GDP) in the second quarter of 2025. The overall increase recorded in the third quarter of 2025 was due to the net increases in other investment, portfolio investment and financial derivatives, partly offset by the net decrease in direct investment.

In the third quarter of 2025, reserve assets decreased by $136.5 billion, as against an increase of $105.5 billion in the second quarter of 2025.

II. International Investment Position

At the end of the third quarter of 2025, both Hong Kong's external financial assets and liabilities stood at a very high level, amounting to $59,586.8 billion (18.2 times of GDP) and $39,936.9 billion (12.2 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 $19,649.9 billion (6.0 times of GDP) at the end of the third quarter of 2025, compared with $18,364.7 billion (5.7 times of GDP) at the end of the second quarter of 2025. 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 2025, Hong Kong's gross ED amounted to $15,746.1 billion (4.8 times of GDP). Compared with $15,463.6 billion (also 4.8 times of GDP) at the end of the second quarter of 2025, gross ED increased by $282.5 billion. This was mainly attributable to the increase in ED of other sectors, while increases in ED of the banking sector, debt liabilities in direct investment (intercompany lending) and ED of the Hong Kong Monetary Authority also contributed.

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 2025, 52.3% of Hong Kong's ED was attributable to the banking sector. Other ED mainly consisted of ED of other sectors (29.9%) and debt liabilities in direct investment (intercompany lending) (16.5%).

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 total value of external financial assets and liabilities is the net IIP of the economy, which provides a measure of net financial claims on non residents plus gold bullion held as monetary gold.

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 and capital account, while Table 3 presents the detailed 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 2025 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 2024 have been revised.

The latest statistical tables of BoP (including seasonally adjusted current account), IIP and ED can be downloaded at the website of the C&SD (www.censtatd.gov.hk/en/scode260.html). Analysis of the statistics, 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 2025 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 or email: bop@censtatd.gov.hk).

The Census and Statistics Department (C&SD)

Financing sandbox launched today with opening of Hong Kong Technology and Innovation Support Centre to foster intellectual property financing and innovation

The Government announced today (December 22) the official launch of the intellectual property (IP) financing sandbox and the opening of the Hong Kong Technology and Innovation Support Centre (HKTISC), marking key milestones in promoting IP financing and further developing Hong Kong's IP trading ecosystem while fostering innovation.

The Chief Executive announced in the 2025 Policy Address the launch of the sandbox to assist pilot sectors (particularly the technology sector) in leveraging IPs for financing with the support of the banking, insurance, valuation, legal and other professions. The sandbox will provide a collaborative and risk-controlled environment for stakeholders to test out the full lifecycle of IP financing and accumulate practical experience in providing IP financing.

With the Commerce and Economic Development Bureau (CEDB), the Intellectual Property Department (IPD) and the Hong Kong Monetary Authority's (HKMA) deliberation, the sandbox is underpinned by the following four core operating principles:

(1) Recognition of IP value: Participating banks will consider the value of IPs owned by borrowing enterprises, alongside the borrower's credit demand, financial position and repayment ability in their credit underwriting process.

(2) Independent and standardised valuation: To ensure credibility, IP valuation will be conducted by independent service providers using universally accepted methods. Where appropriate, qualitative patent evaluation reports can be obtained to support this process.

(3) Risk management: Participating banks should comply with applicable supervisory requirements on risk management, while participating enterprises should comply with the legal and regulatory requirements in respect of maintaining and developing the IP assets concerned.

(4) Stakeholder collaboration: The initiative relies on a cohesive ecosystem. It brings together enterprises that hold IP assets, banks, valuation experts, legal practitioners and other relevant professionals to co-create successful financing transactions.

The Secretary for Commerce and Economic Development, Mr Algernon Yau, said that the IP financing sandbox, together with other related measures announced in "The Chief Executive's 2025 Policy Address", would help leverage Hong Kong's unique strengths to build an ecosystem where IP is protected with rigour, valued with clarity, and financed with confidence, with a view to strengthening Hong Kong's role as a regional IP trading centre.

By enabling enterprises to leverage their IP assets for financing, the sandbox will help unlock a new financing channel, thereby supporting the commercialisation of outcomes of research and development as well as creativity, and promoting innovation and technology as a key driver of economic growth.

Three major banks have committed to participating in the sandbox, while nearly 30 professional firms from the legal and valuation sectors have indicated keen interest in participating. The CEDB, the IPD and the HKMA will closely monitor the progress of the pilot projects, gather feedback, and provide guidance as needed. It is anticipated that several trial cases are in the pipeline for the first phase of the sandbox.

In addition, the HKTISC that officially commenced full operations today is another key complementary initiative in promoting IP financing. With the support of the IPD, the HKTISC will closely engage small and medium-sized enterprises (SMEs) in the innovation and technology sector and provide a qualitative patent evaluation service to assess, based on national standards, the quality of their patents from legal, technological and economic perspectives. The Government will also launch a support scheme through the HKTISC in 2026 to financially assist SMEs to engage professional service providers for the valuation of their whole IP portfolios in monetary terms.

These integrated measures aim to provide an objective reference about the strengths of the patents and the monetary valuation of the whole IP portfolios owned by the SMEs, facilitating more effective credit assessment and investment analysis.

The Technology and Innovation Support Centre is a dedicated programme of the World Intellectual Property Organization (WIPO), which supports researchers and innovators at different stages of the innovation cycle, helping them make use of the IP system (especially by means of patents) to protect their inventions and guiding them to bring the technology to market. With the recognition of the Hong Kong Productivity Council as a Technology and Innovation Support Centre hosting institution by the China National Intellectual Property Administration and WIPO, the HKTISC will join the 200-plus strong Technology and Innovation Support Centre network in the country, which promotes better integration of Hong Kong into overall national development.

Source: AI-found images