Hong Kong’s foreign direct investment (FDI) continued to surge in 2011, according to the United Nations Conference on Trade and Development’s (UNCTAD) “World Investment Report” 2012 (WIR), released in Hong Kong today.

According to the WIR 2012, FDI flows into Hong Kong exceeded US$83 billion in 2011, an all-time high and up by 17 percent over 2010. FDI stock remained stable at US$1.14 trillion compared to US$1.09 trillion in 2010.

Globally, Hong Kong ranked fourth in terms of FDI inflows*, after the U.S. (US$227 billion), the Mainland of China (US$124 billion) and Belgium (US$89 billion). In Asia, Hong Kong was second only to the Mainland in terms of FDI inflows.

The city also topped UNCTAD’s “Global FDI Attraction Index” 2011 with “an attractive investment climate and important hinterland.” The index is an annual measure of an economy’s success in attracting FDI.

Victoria Tang, Associate Director-General of Investment Promotion at Invest Hong Kong, said that although there was economic uncertainty in Europe and the U.S., FDI inflows to Hong Kong remained stable.

Worldwide, FDI inflows in 2011 reached US$1.5 trillion, an increase of 16.5 percent over 2010. But in the face of global uncertainties, UNCTAD is predicting slower growth in 2012, with flows leveling off at about US$1.6 trillion. It cautioned that FDI flows will be “tested severely” in 2012, as the euro crisis continues to weigh on investor sentiment, causing many companies to hold onto cash in their home markets in the event that the economic situation worsens.

UNCTAD revealed that FDI flows into developing countries reached a record US$684 billion in 2011, up 11 percent over a year ago, and accounting for 45 percent of the total global FDI inflow. The surge was led by increases of 10 percent in Asia and 16 percent in Latin America and the Caribbean.

Ms. Tang believed that notwithstanding global uncertainties, Hong Kong would continue to be a preferred destination for FDI. “In the short term, there will be both push and pull factors resulting from the euro crisis. But in the longer term the global economic spotlight will continue to shine on Asia,” Ms. Tang said.

“Hong Kong’s increasing integration with the Mainland economy, plus the city’s enduring advantages mean that we will continue to provide an ideal two-way platform for companies from overseas to enter the Mainland and for Mainland enterprises to go global.”

She added that Hong Kong’s predictable business environment, rule of law, stable tax regime, free flow of information and capital, and a workforce with international and Mainland perspectives, continued to make it a desirable platform for investors.

Co-hosting today’s press conference with Ms. Tang was Professor T J Wong, Dean of the Faculty of Business Administration at the Chinese University of Hong Kong, who provided an analysis of the report’s findings.

About Invest Hong Kong
Invest Hong Kong (InvestHK) is the department of the Hong Kong Special Administrative Region government established in July 2000 to take responsibility for foreign direct investment and support overseas and Mainland businesses to set up or expand in Hong Kong. It provides free advice and customized services to help businesses succeed in Hong Kong’s vibrant economy.

As at June 2012, InvestHK has completed over 2,600 investment projects creating more than 30,000 new jobs in the first year of operation or expansion and over US$8.5 billion of investment.

Source from: http://www.hketousa.gov.hk