Positive Results for Investment Promotion in Hong Kong During 2006
Director-General of Investment Promotion at Invest Hong Kong, Mike Rowse, presents the department's positive results achieved in 2006
Investment promotion in Hong Kong achieved positive results in 2006. At a year-end press conference held on January 9, 2007, the Director-General of Investment Promotion at Invest Hong Kong, Mike Rowse, announced that the department assisted 246 overseas, Mainland China and Taiwan companies to set up or expand operations in Hong Kong during 2006 – representing a healthy growth of 6 percent over 2005, itself a record year.
The investing companies expect these 246 projects to lead to the creation of over 7,835 jobs. This includes more than 3,092 jobs initially, and an additional 4,743 jobs in the next two years as these companies expand.
Year of Steady Growth
Mr. Rowse welcomed the results, stating that they suggest Hong Kong remained a highly attractive location for overseas and regional companies to do business in the region.
While encouraged by the positive results, Mr. Rowse cautioned that Hong Kong must not be complacent as competition in the region was keen. He said the Hong Kong government was committed to understanding and addressing the needs of the international business community in Hong Kong.
"We recognize the importance of continuing to improve our investment environment so that investors will continue to find Hong Kong an attractive place from which to do business in Asia," said Mr. Rowse. "And we at Invest Hong Kong will strengthen our effort to assist foreign, Mainland and Taiwan companies with the establishment and expansion of their businesses in our city."
Hong Kong's Role as Regional and Global FDI Destination
Hong Kong also has maintained its leading position as the preferred destination for foreign direct investment (FDI). According to the "World Investment Report 2006" released by the United Nations Conference on Trade and Development (UNCTAD), Hong Kong remained the second largest FDI recipient in Asia, after Mainland China. FDI inflows to Hong Kong in 2005 reached US$33.5 billion. On a global scale, Hong Kong ranked 6th in FDI inflows in 2005.
Overall foreign direct investment (FDI) into Hong Kong continues to be strong. Hong Kong's Census and Statistics Department reported FDI inflows of US$29.6 billion during the first three quarters of 2006, some $40.29 billion higher than the same period of 2005.
Moreover, the number of regional operations in Hong Kong reached new highs in 2006, demonstrating that Hong Kong remains the preferred base in Asia for foreign companies to oversee their regional operations.
As at June 1, 2006, there were 3,845 companies that were regional headquarters and regional offices, 2,509 companies that were local offices in Hong Kong of companies incorporated outside Hong Kong, according to results of the "2006 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong" conducted by the Census and Statistics Department.
Highlights of 2006
Hong Kong's unique positioning as the gateway to Mainland China and the business hub of Asia has attracted companies from different industries to set up operations to access clients in the region. For example, the Chicago Mercantile Exchange opened its Asia Pacific regional headquarters in Hong Kong to increase the level of services to its Asian-based customers; Bayer MaterialScience opened its Asia Pacific headquarters in Hong Kong to oversee the regional management functions of its business and service units; and Methanex, the world's largest producer and marketer of methanol, relocated its Asia Pacific marketing and logistics operation to Hong Kong.
As part of continued efforts to promote the city's unique position as a base for foreign companies to expand into the Pearl River Delta, Invest Hong Kong published the fourth edition of a study, "The Pearl River Delta - the Facts and Figures", written by Professor Michael Enright of the University of Hong Kong and Edith Scott.
Since the first edition in 2003, the booklet has become one of the most important sources of credible facts and figures about the Greater Pearl River Delta, which includes Hong Kong and Macau. Data provided by the booklet is often referred to by investors in their business development plans for Hong Kong and the PRD.
CEPA Effect
Since the implementation of the Closer Economic Partnership Arrangement (CEPA) in 2004, Invest Hong Kong has been actively organizing and participating in seminars in North America, Europe and Asia Pacific to promote the benefits of setting up operations in Hong Kong under CEPA to potential investors.
The department also measures CEPA's impact on companies' investment decisions. The department found that out of the 246 investment projects completed in 2006, 61 companies (25 percent) indicated that CEPA was one of the factors considered in making the investment. Some 22 companies invested because of CEPA, while some of the 61 companies accelerated their investment plans, and/or invested more capital or employed more staff as a result of CEPA. Similar levels of CEPA's effect on investment have been recorded since it took effect in early 2004.
Looking Forward
In 2006, Invest Hong Kong had successfully attracted investments from different sectors including consumer products, retail, sourcing, financial services, tourism, catering, IT, technology, telecommunications, media and multimedia, professional services, transportation and manufacturing.
Invest Hong Kong's Mr. Rowse said that to help retain existing investors and to encourage their expansion in Hong Kong, Invest Hong Kong would reinforce its after-care services, which include, among other things, assistance with regulatory issues and identifying international schools for the children of ex-pats.
The department also remains committed to its targeted investment promotion activities in both traditional investment source markets and emerging markets.
Mr. Rowse is optimistic about the investment promotion outlook for 2007 and Invest Hong Kong's efforts to retain and attract more companies of strategic importance; companies which not only offer employment opportunities, but also new skills and technologies.
Invest Hong Kong is the Hong Kong Special Administrative Region Government department charged with encouraging and facilitating investment into the city by providing the support needed to establish or expand a business presence.
Invest Hong Kong: www.investhk.gov.hk
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