Director-General of Investment Promotion at Invest Hong Kong Simon Galpin (right) and Dean of the Faculty of Business Administration at the Chinese University of Hong Kong Professor T.J. Wong co-chair a press conference on the "World Investment Report 2010" in Hong Kong Friday. Provided to China Daily

City is highest in FDI stocks in Asia, with a 37 % market share

Hong Kong's appeal to foreign capital has grown stronger despite the fact that the global financial crisis has lowered global investment flow by almost 40 percent in the last year. The city has become the world's fourth largest recipient of foreign direct investment (FDI), according to the World Investment Report 2010 released by the United Nations Conference on Trade and Development.

"Although investment inflow to Hong Kong decreased 19 percent last year, for the first time Hong Kong has surpassed major economies (e.g., the UK) as the hub of global foreign direct investment," disclosed Simon Galpin on Friday at a media briefing. Galpin is director-general of investment promotion at InvestHK, the government agency that attracts foreign direct investment.

In 2009 Hong Kong attracted $48.4 billion in foreign direct investment, a figure lower than the $59.6 billion of 2008 and the $54.3 billion of 2007. Still, the region's global rank climbed to fourth place (from the ninth and 12th of the previous two years) on this year's World Investment Report.

The city ranked the highest in foreign direct investment stocks in Asia, enjoying a 37 percent market share ($912 billion) in 2009, which is 12 percent higher than 2008.

"Hong Kong's status as an international economy is reflected in this record high ranking. With the city positioned at the heart of Asia and as the gateway" to the Chinese mainland, it benefits from the region's economic recovery, asserted Galpin.

He said measures, such as the CEPA and the growing network of Double Taxation Agreements, and Hong Kong's position as the offshore center for renminbi finance, will continue to support the city as the preferred investment destination for foreign and mainland companies.

In the first quarter of 2010, foreign direct investment inflow to Hong Kong amounted to $20 billion, a notable increase of 72 percent from the same period last year, according to data provided by InvestHK.

"Since I've never been busier in assisting foreign companies to set up business in Hong Kong like this year, I am expecting another record for this year," Galpin added.

The report highlights Asia's rapid recovery in foreign direct investment flows, compared with the more gradual improvement in global numbers. T.J. Wong, Dean of the Faculty of Business Administration and Chair Professor of Accountancy at the Chinese University of Hong Kong, says that Hong Kong's unique geographic location allows it to benefit from the fast economic growth of Asia's developing economies.

"Hong Kong will maintain its competitiveness in the region, as firms from the mainland and neighboring economies continue to incorporate in the city to establish a global presence," adds Wong.

According to the local Company Registry, 109,424 companies were incorporated in Hong Kong last year.

The World Investment Report also shows that, in 2009, the United States remained the largest recipient of foreign direct investment. The Chinese mainland ranked second with $95 billion, up from third position in 2008 and seventh in 2007.

China Daily

(HK Edition 07/24/2010 page3)