Hong Kong has retained its position as the best-performing host economy for foreign direct investment (FDI) in Asia and as the region's second largest FDI destination, according to the "World Investment Report 2003" released Friday by the United Nations Conference on Trade and Development.

While FDI inflows declined last year both globally and regionally in difficult economic conditions, UNCTAD forecast that promising prospects in 2003-04 would spur an upturn in FDI -- particularly in Asia and the Pacific.

FDI flows to Asia and the Pacific declined for the second consecutive year, from 107 billion US dollars in 2001 to 95 billion US dollars in 2002. Hong Kong's FDI in 2002 reached 13.7 billion US dollars, down from an adjusted 23.7 billion US dollars in 2001.

However, Hong Kong maintained its position as the second largest recipient of FDI in Asia, behind the Chinese Mainland, it said.

Commenting on the report, the Director-General of Investment Promotion at Invest Hong Kong Mike Rowse said, "it is very encouraging that Hong Kong was able to retain its position as second in FDI inflows and the best performing host economy in Asia."

"This clearly confirms that multinational companies still see the advantages of investing in Hong Kong," he said.

On a global scale, Hong Kong ranked 15th in FDI inflows in 2002. Luxembourg was the largest FDI recipient last year, followed closely by the Chinese Mainland.

(Xinhua News Agency September 5, 2003)