Hong Kong has retained its position as Asia's second-largest destination for foreign direct investment (FDI), according to the United Nations Conference on Trade & Development's "World Investment Report 2005".

Invest Hong Kong's Director-General of Investment Promotion Mike Rowse said at a press conference for releasing the report that the Chinese mainland and Hong Kong Special Administrative Region (HKSAR) have held the No.1 and 2 positions for the last decade.

He said the Chinese mainland and Hong Kong attracted over two-thirds of FDI inflows in the region last year.

Rowse said "we feel pretty chuffed that we are still well in second place. Hong Kong (with 34 billion US dollars in FDI) actually got more than Singapore, Japan and South Korea added together."

He said "while the numbers are heartening, one of the great benefits of the investment coming into Hong Kong is the innovative technological and business know-how contributed to our economy by the new entrants. Some of this know-how is cutting edge -- not only in IT, technology or telecoms sectors, but also in such areas as financial services and sophisticated management consulting."

University of Hong Kong Deputy Vice-Chancellor Richard Wong presented some of the report's key findings. He said that FDI is a result of investment typically made by multinational companies -- companies that are usually more successful, larger and better managed.

"They bring not just money but know-how, technical know-how, management know-how, know-how about markets, know-how about how to manage production more effectively," Wong said.

While Hong Kong's FDI inflow of about 34 billion US dollars, its FDI outflow was close to 40 billion US dollars.

"A lot of Hong Kong companies invest across the border in all kinds of activity, most importantly in manufacturing in the Pearl River Delta, but also in construction, retail, infrastructure, as well as transportation and logistics services," said Wong.

The FDI inflow into the Chinese mainland boosts demand for financial services in Hong Kong, especially as Chinese mainland companies choose to list publicly in the city.

Initial public offerings have soared in Hong Kong: Last year Hong Kong was second only to New York in the amount of IPO activity.

Source: Xinhua