Hong Kong strives to stay on top - Hong Kong - Brief Article

Business Asia, April, 2002

HONG KONG has the edge over the rest of Asia when it comes to foreign direct investment (FDI) and as a preferred location for regional headquarters, but needs to continue working hard to maintain its lead, a top government official says.

John Wan, associate director, General of Investment Promotion for the Hong Kong Special Administrative Region (HKSAR), says Hong Kong is in a league of its own when it comes to foreign investment. But Hong Kong cannot afford to rest on its laurels if it wants to stay on top.

"The amount of FDI we secured in the past few years has been phenomenal," he said. "We need to sustain our efforts in attracting FDI because Asia will be a key magnet for investment in the next few years, and everyone in the region wants a slice.

"As far as results are concerned, we are winning. These other economies are not in the same league. But that doesn't mean we can be complacent at all.

"We have been compared naturally to Singapore, Shanghai and even Sydney. These are all important economies in their own right. On one hand you can say that these are our competitors. On the other hand, they know as well as we do that they are not going to get the share of FDI that Hong Kong is getting, because we are at the top of the league. But if we relax, then we might in the long run lose out."

Business Asia spoke to Wan during his recent visit to Sydney, Australia.

Wan says a recent reorganisation of Invest Hong Kong, a government body set up in July 2000 to specifically focus on attracting new investment, was a key move in HKSAR's attempts to stay in the lead.

"We have assumed a different mode of operation," he said. "We have changed from a geography based operation to what we call a sector based operation.

"For each of our economic and trade offices we have designed a business plan, which can be translated into a number of activities or objectives. We believe that each economic and trade office should focus on a number of priority sectors, but not all."

The nine key sectors now being targeted are transportation, financial services, business and professional, telecommunications, media and multimedia, information technology, other technology (such as biotech or electronics), tourism, and entertainment.

Wan says Australia's most lucrative sector for Hong Kong was in business and professional services, although the local trade office in Sydney would not be limited purely to that sector.

As for the entry of China into the WTO, Wan sees more opportunities than threats.

"We see Shanghai, for example, developing economically in parallel with Hong Kong, and probably a few others (cities on the mainland)," he said.

"One can look at the example of the US. When New York is doing well, it doesn't mean Chicago is doing badly, or San Francisco, because of the size of their economy. The same goes for China. As it opens up economically, it needs more than one Hong Kong to take care of its business.

"If we stay put, then in a number of years China could catch up with us. But we have no intention of standing still."