The front pages are dominated by Hong Kong’s political deadlock, Greece’s probable exit from the eurozone and jihadis killing dozens of people in France, Tunisia and Kuwait – including the first public beheading in Europe in the modern era.
But little noticed was a recent report by the United Nations Conference on Trade and Development (UNCTAD) that represents excellent news for Hong Kong.
In the World Investment Report 2015, it ranked Hong Kong second in the world for both incoming and outgoing foreign direct investment (FDI).
Its inward FDI was US$103 billion, second to mainland China, which had US$129 billion, and surpassing the United States (US$92 billion), Britain (US$72 billion) and Singapore (US$68 billion).
Hong Kong’s outward FDI was US$143 billion, second to the United States, with US$337 billion and surpassing Japan (US$114 billion) and Germany (US$112 billion).
Both figures for Hong Kong are records.
Inward FDI in the previous three years was US$74 billion in 2013, US$70.2 billion in 2012 and US$96.6 billion in 2011.
Outward FDI was US$80.8 billion in 2013, US$83.4 billion in 2012 and US$96.3 billion in 2011.
The figures look even better in a global context.
“Global foreign FDI inflows fell by 16 per cent to US$1.23 trillion in 2014,” the report said.
“This was mostly because of the fragility of the global economy, policy uncertainty for investors and elevated geo-political risks.”
It said overall FDI flows to developed economies fell 28 per cent to US$499 billion.
FDI flows to Africa remained flat at US$54 billion; FDI flows to Latin America and the Caribbean decreased by 14 per cent to US$159 billion.
The brightest star in this gloomy sky was developing Asia.
“Its FDI inflows grew to historically high levels, reaching nearly half a trillion dollars in 2014, further consolidating the region’s position as the largest recipient in the world,” the report said.
“FDI inflows to East and Southeast Asia increased by 10 per cent to US$381 billion.
“The security situation in West Asia led to a six-year continuous decline of FDI flows, down 4 per cent to US$43 billion in 2014.”
The report published a map of East and Southeast Asia, the world’s fastest-growing and most dynamic economy. Hong Kong is in the center of it.
So what do the figures tell us?
They tell us that, despite two years of intense political and social conflict, the gradual internationalization of the renminbi and billions of yuan invested in improving the business infrastructure of Beijing and Shanghai, Hong Kong remains the international economic capital of China.
There is no other city in China in which mainland and foreign investors, individual and corporate, would rather put their money.
The reasons are the same as they have been for many years – an independent legal system, financial security, free movement of capital and free exchange of currencies.
Simon Galpin, director general of investment promotion at InvestHK, said: “It is very encouraging to see Hong Kong rank second in global FDI flows with both record amounts of inflows and outflows.
“The numbers highlight Hong Kong’s role as a ‘super-connector’ and a conduit for direct investment.
“Foreign investors use Hong Kong as a base to then invest in the rest of China and the region.
“Mainland companies increasingly use Hong Kong as a platform to make global investments and acquisitions.”
China is on course to become the world’s biggest supplier of FDI and could overtake the US within five years.
Never in history has there been such a large outflow of capital from the country.
No city in China offers the expertise, convenience and access that mainland companies need to prepare their foreign mergers and acquisitions.
The anticorruption campaign of President Xi Jinping, unprecedented in the post-1978 era, makes Hong Kong even more attractive.
Mainlanders see the banks in the city that are not owned by the Chinese state as outside the reach of anticorruption investigators.
They see the campaign as driven by political struggle more than moral rectitude.
For foreign companies and individuals, also, Hong Kong has remained very attractive, despite its soaring rents and “mainlandisation” and enormous investment by mainland cities to attract them to move there.
It remains a very competitive city for foreign firms to establish their China or Pacific headquarters and for corporate expatriates and families to live and educate their children.
So, for Hong Kong people uneasy about the political conflict and the future of the city, the UNCTAD report is a welcome piece of good news, a reminder that, 18 years after the handover, it remains a city apart from the metropolises of the mainland.
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