External Investment

Hong Kong's attractiveness as a place to do business is reflected by two major indicators, namely the inflow of foreign direct investment (FDI), and the number of foreign-owned regional headquarters and regional offices.

In 2000, Hong Kong was the top destination in Asia for FDI with inflow totalling US$61.9 billion, which represented a 152 per cent increase over the 1999 level of US$24.6 billion.

A Census and Statistics Department survey shows that Hong Kong had 9 207 enterprise groups¹ with inward direct investment at the end of 2000, comprising 486 in the manufacturing sector and 8 721 in the non-manufacturing sectors. The market value of the stock of inward direct investments amounted to $3,551.3 billion. Chart 3 shows the major economic activity of these enterprise groups while Chart 4 shows source countries/territories of the inward direct investments. Regarding employment, more than two-thirds of them were enterprise groups employing fewer than 20 persons (Chart 5).

Chart 3:	Position of Inward Direct Investment in Hong Kong at Market Value by Major Economic Activity of Hong Kong Enterprise Group at end-2000

Chart 4:	Position of Inward Direct Investment in Hong Kong at Market Value by Major Investor Country/Territory at end-2000
Remarks: British Virgin Islands, Bermuda and Cayman Islands are important offshore financial centres commonly used by investors to channel inward direct investment funds to Hong Kong.

Chart 5:	Number of Hong Kong Enterprise Groups (HKEGs) with Inward Direct Investment by Employment Size in mid-2000

Another Census and Statistics Department survey found that, on June 1, 2001, there was a total of 3 237 regional headquarters and regional offices established in Hong Kong by companies incorporated outside Hong Kong. Compared with the corresponding figure of 3 001 recorded for 2000, there was an increase of 8 per cent.