Simon Galpin, director-general of investment promotion at Invest Hong Kong, says the inflow of FDI to Hong Kong has been increasing over the past three years.

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) on September 18.

Hong Kong continues to be Asia’s second largest and 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 be cut in half. Hong Kong also continues to have the highest FDI stock in the region amounting to nearly US$835.8 billion.

Mainland China 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 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.

Director-General of Investment Promotion at Invest Hong Kong Simon Galpin cautiously welcomed the results. “We are delighted that Hong Kong continues to be one of the world's and Asia's most attractive destinations for FDI,” he said. “However we recognize 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.”

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. It provides free services and support to help overseas, Mainland and Taiwanese companies establish or expand their business presence in Hong Kong.