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 of companies incorporated outside Hong Kong.

    A Census and Statistics Department survey shows that Hong Kong's FDI inflow in 2001 amounted to US$23.8 billion. According to the 'World Investment Report 2002' released by the United Nations Conference on Trade and Development, Hong Kong was the second largest recipient of FDI in Asia in 2001.

    Hong Kong had 9 132 enterprise groups¹ with inward direct investment at the end of 2001, comprising 374 in the manufacturing sector and 8 758 in the non-manufacturing sectors. The market value of the stock of inward direct investments amounted to $3,269.7 billion. Chart 3 shows the major economic activities of these enterprise groups while Chart 4 shows source countries/territories of the inward direct investments. Regarding employment, more than 66 per cent 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-2001

Chart 4: Position of Inward Direct Investment in Hong Kong at Market Value by Major Investor Country/Territory at end-2001
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-2001

    According to the survey conducted by the Census and Statistics Department, on June 1, 2002, there was a total of 3 119 regional headquarters and regional offices in Hong Kong of companies incorporated outside Hong Kong. Compared with the corresponding figure of 3 237 recorded for 2001, there was a decrease of 3.6 per cent.