Published by the United Nations Conference on Trade and Development (UNCTAD), the report also placed Hong Kong second in the global rankings after Belgium/Luxembourg.

Hong Kong's top ranking came at a time when overall FDI flows to Asia and the Pacific declined by 24 per cent to HK$794 billion (US$102 billion). The report also showed that global FDI inflows in 2001 declined to HK$5,718 billion (US$735 billion), less than half the 2000 figure.

UNCTAD said the decline was due to the slowdown in the world economy and the September 11 terrorist events in the US, both of which contributed to a sharp reduction in cross border mergers and acquisitions that take place between industrialised countries.

In 1999, Hong Kong's inflow of FDI amounted to HK$191 billion (US$24.6 billion). On a global scale, Hong Kong ranked 10th in FDI inflows in 2001, with the US and UK as the top and second largest recipients respectively, and the mainland the sixth.

The director-general of Investment Promotion at Invest Hong Kong, Mike Rowse, said it is encouraging to see that Hong Kong has maintained its position as a major destination for FDI. "This is particularly important in times when overall investment is on the decline. Being named the best-performing host economy in Asia and number two in the world clearly confirms that Hong Kong's business environment and its fundamentals remain highly attractive to international investors."

In its benchmark study, UNCTAD measured an economy's performance by standardising FDI inflows to the size of the economy and assessed its investment potential by using a set of economic and policy factors of importance to foreign investors. Taken together, UNCTAD's Inward FDI Performance and Inward FDI Potential Indices show how countries are performing relative to their investment potential.

Related links:
Asia's best performing host economy  www.info.gov.hk/gia/general/200209/18/0918082.htm 
United Nations Conference on Trade and Development www.unctad.org/
Invest Hong Kong www.investhk.gov.hk/