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ECONOMY | Tony Chua, Hong Kong

Hong Kong 3rd in foreign direct investment flows worldwide rankings

Hong Kong ranked highest in Asia in of foreign direct investment stock last year, enjoying a 30% share, or a little over US$1tn.

Hong Kong was the world's third largest recipient of foreign direct investment flows last year, according to the United Nations Conference on Trade & Development's World Investment Report 2011 released on Wednesday.

Speaking at a press conference, Director-General of Investment Promotion Simon Galpin said this marks the first time Hong Kong has gained third place in the global rankings, having jumped into fourth place in 2009 from ninth position in 2008.

For the 13th consecutive year, Hong Kong continued to be the second largest foreign direct investment recipient in Asia, after the Mainland. The all-time record of US$68.9 billion inflows to Hong Kong last year represented a 31.5% increase over 2009.

In terms of foreign direct investment stock, Hong Kong ranked highest in Asia, enjoying a 30% share, or a little over US$1 trillion last year. As a point of comparison, in 1990 Hong Kong's foreign direct investment stock was almost US$202 billion.

Looking ahead, the report said a 5% rise in global inflows to US$1.2 trillion showed modest improvement in the wake of the global financial crisis, according to a government report.

Meanwhile, developing and transition economies attracted most global foreign direct investment inflows. The Mainland, Hong Kong, Brazil, Russia, Singapore, Saudi Arabia, India, Mexico, Chile and Indonesia together accounted for 32% of total foreign direct investment inflows last year.

"With Hong Kong positioned at the heart of Asia and as the gateway to China, it is clearly benefiting from the shift in economic interest to the East," Mr Galpin said.

According to the United Nations Conference on Trade & Development, inflows and outflows for developing Asian economies are expected to continue to grow.

Countries in the region have made considerable progress in their regional economic integration efforts, which will translate into a more favourable investment climate for intraregional foreign direct investment.

With regards to developed economies, preliminary data from the United Nations Conference on Trade & Development for the first half of this year suggest foreign direct investment growth will gradually strengthen for developed countries this year.

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