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Hong Kong's status as one of the world's and Asia's leading destinations for foreign direct investment (FDI) and sources of outward FDI has been reaffirmed by the World Investment Report 2008 released by the United Nations Conference on Trade and Development today (September 25).
Hong Kong was the world's seventh and Asia's second largest FDI recipient, attracting US$59.9 billion inward investment in 2007. This amount was more than the combined total of the next three highest FDI recipients in Asia – Singapore, India and Thailand. In addition, Hong Kong was ranked Number 1 globally in the report's Inward FDI Performance Index, which measures the amount of FDI relative to the size of the economy.
Mainland China still ranked first in Asia Pacific in FDI inflows, reaching US$83.5 billion. Other advanced economies in the region also performed well: Singapore with US$24.1 billion; India, US$23 billion; and Thailand, US$9.6 billion.
The report attributed the strong results to general improvements in the investment environment in the region. These positive changes included further liberalisation of FDI, strengthened regional economic integration, resilient economic growth and strong industrial development. The report also forecasted that, in spite of global economic slowdown, prospects for FDI inflows to the region remain promising as all these factors are expected to continue to attract inflows.
Globally, the FDI inflows rose last year by 30% to reach an all-time high of US$1.83 trillion. The unprecedented levels of cross-border mergers and acquisitions (M&As) activities contributed to this growth, and sovereign wealth funds (SWFs) have become a significant source of global FDI.
Mr Mike Rowse, Director-General of Investment Promotion at InvestHK, welcomed the results. He said, "We are delighted that Hong Kong's status as one of the world's and Asia's most attractive destinations for FDI has again been reaffirmed by UNCTAD. Being recognised as the world's best performing economy in inward FDI is especially gratifying."
"For years, North America and Europe have been our major sources of FDI. However, with the rise of the Chinese economy and the increased outward expansion of privately owned enterprises (POEs), Mainland China has become more significant in our FDI inflows and we expect this trend will continue."
Looking ahead, Mr Rowse said, "We believe Hong Kong will continue to be highly attractive to overseas and Mainland companies. The fundamentals of our investment environment are sound: rule of law, free flow of information, world-class infrastructure and clean government are all in place. Establishing a presence overseas is a long term strategic decision which generally will be less affected by short-term economic conditions. However, we expect, in view of the recent economic downturn and financial turmoil, that many companies may be more cautious in carrying out their outward investment plans."
InvestHK is the award-winning department of the Hong Kong Special Administrative Region Government responsible for attracting and facilitating inward investment into the city, by providing free services and support to help overseas and Mainland companies establish or expand their business presence in Hong Kong. For more information, please visit www.InvestHK.gov.hk.
Ends/Thursday, September 25, 2008
Issued at HKT 17:01
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