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2003 was the most successful year ever for investment promotion in Hong Kong. Invest Hong Kong (InvestHK) announced today (January 13) that the department successfully assisted 142 foreign companies to set up or expand operations in Hong Kong during the past 12 months -- an increase of 21% compared to 2002. These projects brought in at least HK$2.49 billion (US$319 million) and created more than 2,456 jobs for the city.

Welcoming these results, the Director-General of Investment Promotion at InvestHK, Mr Mike Rowse, said at a year-end press conference today: "2003 was a gratifying year for investment promotion in Hong Kong. Despite challenges brought by SARS and difficult economic conditions during the first half of this year, companies continued to invest in our city and Hong Kong remains the preferred location for international businesses serving the Asia Pacific region."

FDI inflows strengthened

Hong Kong has maintained its leading position as a preferred destination for foreign direct investment (FDI). In the latest "World Investment Report 2003" released by the United Nations Conference on Trade and Development (UNCTAD), Hong Kong was named again as the best-performing host economy for FDI in Asia. In terms of FDI, Hong Kong reached US$13.7 billion in 2002 and still held the position as the second largest recipient of FDI in Asia, after the Mainland (US$52.7 billion).

Moreover, as at June 2, 2003, the number of regional headquarters (RHQ) in Hong Kong reached 966, an all-time high. Another 2,241 companies operated regional offices in the city, up 3.2% from the previous year.

Mr Rowse said, "In a difficult year economically, it is especially encouraging that Hong Kong remains 2nd in Asia in FDI inflows and a major destination for FDI globally - and that the number of regional headquarters reached another all-time high. This is particularly impressive in times when overall investment has been declining globally.

"And there is more good news. For the first three quarters of 2003, the Census and Statistics Department reported FDI inflows of HK$115.4 billion (US$14.8 billion) into Hong Kong. This amount has already exceeded the total amount of FDI in all of 2002 by HK$15.6 billion (US$2 billion). The results show that the fundamentals of Hong Kong's business environment remain attractive to foreign investors and augur well for the future."

Highlights of 2003

During 2003, several key projects were initiated that had a significant positive impact on the Hong Kong's economy. In August, the Hong Kong SAR Government, the Airport Authority and the consortium led by Dragages et Travaux Publics (HK) Limited reached a joint-venture agreement for the design, construction and operation of a new International Exhibition Centre (IEC) at Hong Kong International Airport. The IEC represents a milestone for the continued growth of the exhibition industry in Hong Kong and will consolidate our position as the convention and exhibition hub in the Asia-Pacific region. The project, with total net economic benefit projected at HK$10.4 billion over a 25-year period, will bring significant benefits to the economy. The IEC will create about 2,000 jobs during the construction stage, and will directly employ about 150 staff and indirectly about 800 staff when in operation.

InvestHK has devoted increased resources to encouraging more Mainland companies to invest in our city as the gateway to global markets -- taking advantage of our first-class business infrastructure, free flow of goods and information, liquid capital markets and strong regulatory environment. In the past 12 months, InvestHK has actively promoted these advantages in key Chinese cities such as Beijing, Nanjing, Xiamen, Jinan and Chengdu.

These activities have contributed to the influx of projects from the Mainland and reinforced Hong Kong's position as the springboard for Mainland private enterprises to expand regionally and globally. The largest retailer of home electrical appliances in the Mainland, Gome Home Appliances, opened its first store outside the Mainland in Hong Kong. China's leading software maker UFSoft established its first overseas office here, as a strategic step for its expansion into Southeast Asia.

Hong Kong's advantages -- including our sophisticated logistics infrastructure, geographic location, level playing field, simple and low tax system and rule of law -- continue to attract foreign companies to choose Hong Kong to set up regional headquarters. For example, leading Swedish biotech company Perbio Science AB and top German retailer METRO AG set up regional operations here during 2003. METRO AG's operation covers all markets outside the European Union.

"These are just a few examples of foreign investment during the past 12 months. The message is simple and clear - Hong Kong is the ideal and preferred investment destination for companies. We are confident that 2004 will be another successful year for foreign investment in Hong Kong," Mr Rowse said.

Another priority for InvestHK has been to promote Hong Kong's distinct advantages as a place for multinational firms to access the rest of the Pearl River Delta. Activities have included several successful joint investment promotions with Guangzhou, Shenzhen and Dongguan in North America, Japan and Korea.

To help inform companies about the opportunities for investors in the Greater Pearl River Delta - including Hong Kong and Macau -- InvestHK published a study: "The Pearl River Delta - the Facts and Figures." The booklet supplies relevant, credible facts and figures about the region and profiles its major cities. Written by Professor Michael Enright of the University of Hong Kong and author Edith Scott, it shows that the Pearl River Delta has become the most economically dynamic region in China. The report can be downloaded from our website www.InvestHK.gov.hk.

Investment promotion activities included sponsoring and participating in several major international conferences. BusinessWeek's CEO Forum in November featured leading business executives and government officials, such as Chinese Vice Premier Zeng Peiyan and former US President Bill Clinton, and attracted over 600 delegates. InvestHK supported other major events in 2003, such as the 21st Pacific Insurance Conference with 300 senior executives form the life and health insurance industry; CASBAA (The Cable & Satellite Broadcasting Convention 2003) with 91 speakers and some 1,100 delegates from around the world; and the Chinese World Seminar, which attracted 300 French CEOs based in France and Asia, sinologists and senior officials from France and China.

"Best in Asia Pacific"

The performance of InvestHK as an inward investment promotion agency won international recognition. Strategic Direct Investor magazine presented the department with the award for "Best Overall Managed Investment Promotion Agency (IPA) in Asia Pacific." In the same Asia Pacific IPA Awards 2003, InvestHK also won awards in other categories, including "Best North Asia IPA", "Best IPA in Creating Partnerships" and "Best IPA in Attracting Financial Services Investment".

In addition, InvestHK was selected as one of Hong Kong's "Superbrands" by top advertising and marketing professionals. The department was also named "category winner" in the Banking, Financial Services category of the Superbrands.

Looking Forward

While welcoming the recognition, Mr Rowse made it clear that InvestHK would not rest on its laurels. He said: "We are very pleased with the encouraging results we achieved in 2003 -- and with the skills, hard work and dedication of our team that made these accomplishments possible. However, we are aware of the keen competition for investment in the region. InvestHK will continue to strengthen our efforts to retain our competitive edge as the preferred business hub in Asia and to attract targeted foreign investors.

"Our target for 2004 is 200 completed projects, over 40% more than last year. To achieve this ambitious goal, we look forward to working even more proactively and responsively with the business community to facilitate the establishment and expansion of their operations in Hong Kong," he concluded.

InvestHK's investment promotion teams will continue to arrange frequent overseas visits to call on companies with an interest in Hong Kong. The department will offer assistance in the investment process, from decision-making to setting up of operations in Hong Kong, as well as providing after-care services. InvestHK will work with consulates and chambers of commerce to organise community programmes in conjunction with some of these visits.

In the coming year, InvestHK will again host and participate in major international events to promote inward investment. For example, both BusinessWeek's Asia Leadership Forum and the Forbes Global CEO Conference will return to Hong Kong in 2004. InvestHK will take part in targeted overseas seminars and events to raise Hong Kong's profile, inform potential investors about Hong Kong's advantages and to strengthen Hong Kong's position as an investment destination.

With the implementation of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland, the department also will organise or take part in additional seminars in the coming months to provide information and advice to Mainland companies planning to expand abroad - and to companies abroad interested in investing in Hong Kong and the Greater Pearl River Delta.

Invest Hong Kong was established in July 2000 by the Hong Kong Special Administrative Region Government to encourage and facilitate foreign investment into the city by providing all the support needed to establish a business presence here.

Ends/Tuesday, January 13, 2004

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( Floor / Cantonese)