Hong Kong attracts record investment despite global FDI inflows declining, reaffirming its position as Asia Pacific's leading city for international business

Hong Kong attracts record investment despite global FDI inflows declining, reaffirming its position as Asia Pacific's leading city for international business
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     Hong Kong's status as one of the world's and Asia Pacific's leading destinations for foreign direct investment (FDI) has been reaffirmed by the World Investment Report 2009 released by the United Nations Conference on Trade and Development (UNCTAD) today (September 18).

     Hong Kong continues to be Asia's second largest and is the world's seventh largest FDI recipient, attracting US$63 billion inward investment in 2008. This amount represented a 15.9% increase year-on-year in spite of the global financial and economic crisis that has caused FDI inflows to some developed economies to half. Hong Kong also continues to have the highest FDI stock in the region amounting to nearly US$835.8 billion.

     Mainland China still ranked first in Asia Pacific in FDI inflows and has moved up four places to be the world's third largest FDI recipient, attracting US$108.3 billion FDI in 2008, an increase of 29.7% compared to 2007. This excellent result helped FDI into the region excluding Japan to rise by 17.3% to reach a record high of US$297.6 billion for the year, bucking the trend of other regions.  However, the performance of the major economies in the region in attracting FDI varied significantly. FDI inflows to Hong Kong, Mainland China, India and South Korea increased, but fell sharply in Singapore and Taiwan.

     Globally, FDI inflows declined 14.1% in 2008 from a historic high of US$1.98 trillion in 2007 to US$1.7 trillion. The crisis has also caused a significant change in the global FDI landscape.  Developing and transition economies now account for 43% share of global FDI in 2008. This change in the pattern of inflows is partly due to the large decline in FDI inflows to developed countries, which in 2008 shrank by 29% compared with last year.

     Unfortunately the slide in FDI has continued into 2009 with added momentum: preliminary data for 96 countries suggest that in the first quarter of 2009, inflows fell a further 44% compared with their level in the same period in 2008. UNCTAD forecast in 2009 global FDI inflows will fall to below US$1.2 trillion, with a slow recovery in 2010 that should speed up in 2011.

     Director-General of Investment Promotion at Invest Hong Kong, Mr Simon Galpin, cautiously welcomed the results. He said, "We are delighted that Hong Kong continues to be one of the world's and Asia's most attractive destinations for FDI. However we recognise that businesses are operating in very tough global economic conditions and that we have to work doubly hard to attract them to expand in these uncertain times."

     Looking ahead, Mr Galpin said, "We believe overseas, Mainland and Taiwanese businesses will continue to set up and expand in Hong Kong because of our strategic location. Hong Kong is the ideal two-way platform for overseas companies to do business in the region and for Mainland enterprises to develop their international business interests. We are committed to maintaining our enduring business advantages: rule of law, low tax and free flow of capital, goods and information which together with our international business environment provide a familiar and secure base for businesses in the region."

     Co-hosting today's press conference with Mr Galpin was Professor Leonard Cheng, Dean of the School of Business and Management of The Hong Kong University of Science and Technology, who provided an analysis of the report's findings.

About Invest Hong Kong
Invest Hong Kong 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, Mainland and Taiwanese companies establish or expand their business presence in Hong Kong. For more information, please visit www.InvestHK.gov.hk.

About United Nations Conference on Trade and Development (UNCTAD)
Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy. For more information, please visit www.unctad.org.

Ends/Friday, September 18, 2009
Issued at HKT 12:55

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