David O'Rear chief economist of Hong Kong General Chamber of Commerce believes that the SAR is heading for better times

The increasing numbers of both visitor arrivals and overseas companies setting up offices in Hong Kong speaks volumes for the SAR's continuing ability to attract foreign investment to the region.

Two recent separate Business Outlook surveys by Hong Kong-based international chambers of commerce revealed that member companies are more optimistic about the SAR's medium term economic growth than they were a year ago.

"Hong Kong continues to be a very attractive place to do business in the region," said American Chamber of Commerce (Amcham) chairman James Thompson. "The overall business environment remains positive despite the current economic recovery period.  Hong Kong's economic fundamentals continue to be strong and we expect further economic growth by 2003."

China remains one of the great driving forces behind Hong Kong's success, and with the mainland's WTO membership now over one year old, the SAR's role in the country's future has been defined.

According to David Eldon, chairman of banking conglomerate HSBC, Hong Kong as the gateway to China is the conduit between foreign investors and the largest and fastest growing market in the world.
 
"Hong Kong is a highly efficient centre for services - financial and otherwise - that China needs now and in the future. It is also home to a significant number of mainland-savvy business people and skilled professionals vital for foreign companies operating in China," he said.

More overseas firms move in

A survey by the Census and Statistics Department showed the number of overseas-incorporated companies setting up local offices in Hong Kong had jumped 41.2 percent to 1,748 in the 12 months to June 1, 2002.

Japan topped the list with 296 companies having local offices in Hong Kong, followed by the Chinese mainland with 290, and the US with 272. The number of companies with regional headquarters based in Hong Kong also increased to 948. The major lines of business of the regional headquarters were wholesale, retail and import/export trades, and business services.

Director-general of Invest Hong Kong Mike Rowse said: "The results of the survey once again indicate that Hong Kong's business environment and its fundamentals remain attractive to international investors."  Philips and British American Tobacco moved their regional headquarters to Hong Kong this year. Italian fashion group Armani recently opened in the SAR their biggest store in the world outside Milan.

In its annual survey, Washington-based think-tank The Heritage Foundation named Hong Kong the world's freest economy for the ninth consecutive year. The index measures 50 factors, including capital flows and foreign investment, monetary and trade policy, wages and prices, government intervention, property rights, regulation and black market activity.

According to David O'Rear, chief economist at the Hong Kong General Chamber of Commerce (HKGCC), that survey and those of the American and British chambers of commerce reflect the positive outlook of member companies of the HKGCC - Hong Kong's largest.

"We have clearly turned the corner: GDP is rising sharply, deflation is less than a few months ago, job creation is rising more quickly and demand is picking up in our key external markets of China, the US and Japan," he explained.

World-class conference venue

Confirming the SAR's position as a world-class conference location, the Hong Kong Convention and Exhibition Centre was host to 2,296 events, attracting over five million visitors in the 12 months to June 30.

Read Big business drawn to region's global platform and Mainland buyers stream into Hong Kong.

Hong Kong hosted a number of international events including the 16th World Congress of Accountants, Forbes Global CEO Conference, Air Cargo Forum 2002 and ITU Telecom Asia 2002.

Conference visitors contributed to a record year for the Hong Kong International Airport following continued steady growth in passenger and cargo traffic in the latter half of the year.

The airport - which was named the World's Best in 2002 for the second year running - reported passenger throughput in November was 2,758,000, a 15.8 per cent increase on the previous November and 5 per cent higher than the same month in 2000.
 
November cargo throughput was 253,000 tonnes, the highest monthly figure ever. This was 24 and 18.8 per cent higher than November 2001 and November 2000 respectively.
 
US Consul General James Keith believes the synergy created between Hong Kong and the Pearl River Delta (PRD) in southern China has helped the SAR remain strong.

"Hong Kong has rule of law and world's best business practices. Combined with the close interation between Hong Kong 's government officials and professional service providers and their counterparts in the PRD, the result is a winning partnership."

Related links:
Amcham www.amcham.org.hk
HKIA www.hkairport.com
HSBC www.hsbc.com
Hong Kong General Chamber of Commerce www.chamber.org.hk
HKCEC www.hkcec.com