Campus Recruitment TalkHKUST (11.09.2002)

Promotion of Inward InvestmentPresentation by the Director-General of Investment Promotion

Title Page

Vision & Mission of InvestHK

VisionTo confirm and strengthen Hong Kong as

the leading international business location in

Asia.

MissionTo attract to and retain in Hong Kong

economically and strategically important investment.

Mode of Operation

ReactiveProactive

Aftercare

InvestHK External Presence

Sydney

Shanghai

LondonToronto

San Francisco

New York

Brussels

HONG KONG

Beijing

YESWECAN

Guangzhou

Tokyo

Marketing Activities

• Sponsorship of Major Business ConferencesFortune Global Forum 2001Forbes Global CEO Conference 2002

• Sponsorship of International Sporting EventsBT Global ChallengeHong Kong Rugby 7s

• Membership of International Chambers of Commerce

Foreign Direct Investment (FDI) Inflow in Asia (in billion US dollars)

Source: UNCTAD World Investment Report 2002

1996 1997 1998 1999 2000 2001

1 Mainland China40.2

Mainland China44.2

Mainland China43.8

Mainland China40.3

Hong Kong61.9

Mainland China46.8

2 Hong Kong10.5

Hong Kong11.4

Hong Kong14.8

Hong Kong24.6

Mainland China40.8

Hong Kong22.8

3 Singapore8.6

Singapore10.7

Singapore6.4

Japan12.7

S. Korea9.3

Singapore8.6

4 Malaysia7.3

Malaysia6.3

S. Korea5.4

Singapore11.8

Japan8.3

Japan6.2

5 Indonesia6.2

Indonesia4.7

Thailand5.1

S. Korea9.3

Singapore5.4

Taiwan4.1

6 Thailand2.3

Thailand3.6

Japan3.2

Malaysia3.9

Taiwan4.9

Thailand3.8

7 S. Korea2.3

Japan3.2

Malaysia2.7

Thailand3.6

Malaysia3.8

S. Korea3.2

8 Taiwan1.9

S. Korea2.8

Philippines1.8

Taiwan2.9

Thailand2.8

Philippines1.8

9 Philippines1.5

Taiwan2.2

Taiwan0.2

Philippines0.6

Philippines1.2

Malaysia0.6

10 Japan0.2

Philippines1.2

Indonesia-0.3

Indonesia-2.7

Indonesia-4.5

Indonesia-3.3

Exceptional

X-border transaction

Foreign Investment Attracted

508

1680 1577 1554

0

500

1000

1500

2000

Jul-Dec 2000 Jan-Jun 2001 Jul-Dec 2001 Jan-Jun 2002

Investment Amount

($HK million)

Regional Headquarters and Regional Offices in Hong Kong

1650

840

2146

855

2293

944

0

500

1000

1500

2000

2500

3000

3500

1999 2000 2001

RHQ

RO

Slight drop in 2002 Mainly Japanese firms(mainly closing NOT moving out)

Strengths of Hong Kong

Tax system Rule of law and legal framework Convertible currency, absence of

foreign exchange controls Free flow of information World class infrastructure

Aspects to be Improved

High cost of business and residential premises

High cost and availability of qualified personnel

Low standard of English and declining use

Environmental pollutionDifficulty of bringing in key Mainland

personnel

Certainty

Consistency

Clarity

Creditabilit

y

4Cs

MGC’S Re-collection & MGC’S Re-collection & SharingSharingThe HKSAR Govt

Community AttitudePhilips/Gold Star JV -

its headquarters in HK

Why choose HK -->

MGC’S Re-collection & MGC’S Re-collection & SharingSharing

after Intensive due after Intensive due intelligenceintelligence

• Space Program• Heavy military base• Large bunch of hi-tech graduates

MGC’S Re-collection & MGC’S Re-collection & SharingSharing

Critical Hi-tech Success Factors :

•Regional base for Pacific Region

•National level - compete with Beijing & Shanghai

•Sub-regional - PRD (HK is Complementary)

MGC’S Re-collection & MGC’S Re-collection & SharingSharing

What HK could offer to MNCs

walking with walking with a a swaggerswagger

5 Key Criteria in becoming a Financial Institute • Fully convertible currency

• No restriction in flow of capital

• Legal system built on international acceptable principle

• FREE flow of information

• The Gov’t does not own any part of the banking community

MGC’S Re-collection & MGC’S Re-collection & SharingSharing

Vocational Training CouncilTransport Logistics Symposium(24 October 2002)

Mainland Economy: An Overview

Overall size of US$1.2 trillion, growing at an Overall size of US$1.2 trillion, growing at an annual average of 7.8% over past 5 yearsannual average of 7.8% over past 5 years

Growth in 2001 was 7.3%Growth in 2001 was 7.3%

Target growth for the 10Target growth for the 10thth “Five-year Plan” “Five-year Plan” (2001-2005) is 7%, reaching US$1.5 trillion by (2001-2005) is 7%, reaching US$1.5 trillion by 2005 or 29% of Japan’s projected GDP for 2005 or 29% of Japan’s projected GDP for that yearthat year

Future growth factors: rising domestic Future growth factors: rising domestic demand, “Western Development” and demand, “Western Development” and accession to WTOaccession to WTO

Pearl River Delta (PRD) in Focus

Includes most vibrant Mainland cities Includes most vibrant Mainland cities such as Guangzhou, Shenzhen, Zhuhai, such as Guangzhou, Shenzhen, Zhuhai, Dongguan, Zhongshan, Huizhou and Dongguan, Zhongshan, Huizhou and Zhaoqing in addition to Hong Kong Zhaoqing in addition to Hong Kong SAR and Macau SARSAR and Macau SAR

Covers an area of 42,821 sq. km, or Covers an area of 42,821 sq. km, or one-fourth of Guangdongone-fourth of Guangdong

A population of 47.87 million, with GDP A population of 47.87 million, with GDP at US$258 billionat US$258 billion

Economic growth at an average of Economic growth at an average of 6.8% for the past 5 years6.8% for the past 5 years

GDP of Major cities in PRD in 2001

3,2613,2614,3804,380Zhongshan Zhongshan 中山中山3,5413,5414,4294,429Zhuhai Zhuhai 珠海珠海4,5644,5646,9946,994Dongguan Dongguan 東莞東莞1,9521,9527,4327,432Jiangmen Jiangmen 江門江門3,8633,86312,90812,908Foshan Foshan 佛山佛山5,2385,23823,61523,615Shenzhen Shenzhen 深圳深圳4,5924,59232,44832,448Guangzhou Guangzhou 廣州廣州14,28114,2816,2026,202Macau SAR Macau SAR 澳門澳門24,38324,383163,974163,974HKSAR HKSAR 香港香港

GDP per capitaGDP per capita

(US$)(US$)GDPGDP

(US$ million)(US$ million)

Strengths of PRD

Manufacturing capabilityManufacturing capability

Technology baseTechnology base

Universities and research Universities and research institutions institutions

Services industries Services industries

International financial services International financial services (Hong Kong SAR)(Hong Kong SAR)

Recreational facilities (Macau SAR)Recreational facilities (Macau SAR)

Hong Kong:A Natural Partner for PRD

Already Guangdong’s largest Already Guangdong’s largest trading partnertrading partner

World class infrastructure World class infrastructure (physical and information)(physical and information)

Business “know-how” and Business “know-how” and international connectionsinternational connections

Well-established legal systemsWell-established legal systems

Hong Kong Port’s World Ranking in Containerised Cargo Throughput (2001)

0.0

2.04.0

6.08.0

10.0

12.014.0

16.018.0

20.0H

on

g K

on

g

Sin

ga

po

re

Bu

san

Ka

oh

siu

ng

Sh

an

gh

ai

Ro

tter

da

m

Lo

s A

ng

eles

Sh

enzh

en

Ha

mb

urg

Lo

ng

Bea

ch

Mil

lion

TE

U

World Top 10 Container PortsWorld Top 10 Container Ports

Source: Containerisation International

Major Ports within PRD

Ports Container Throughput in 2001(million TEU)

Hong Kong 17.83

Shenzhen 5.10

Guangzhou 1.72

Zhongshan 0.47

Zhuhai 0.33

Jiangmen 0.16

Container Throughput ComparisonContainer Throughput Comparisonof Hong Kong and Major Portsof Hong Kong and Major Ports

in Guangdong/PRDin Guangdong/PRD

Sharpening Our Competitive Edge in Maritime Transport Port cargo growth following Mainland Port cargo growth following Mainland

China’s accession to WTOChina’s accession to WTO

CT9 developmentCT9 development

Container port productivity Container port productivity enhancementenhancement

Hong Kong Port - Master Plan 2020Hong Kong Port - Master Plan 2020

Our Strengths: Logistics Hub

Logistics Heart of AsiaLogistics Heart of Asia

Prime locationPrime location

World class infrastructureWorld class infrastructure

Physical and information Physical and information connectivityconnectivity

A culture for excellenceA culture for excellence

Friendly business environmentFriendly business environment

Conclusion: A New Partnership

Mainland – Mainland –

a strong growth engine for the world economy, a strong growth engine for the world economy, with high growth potentialwith high growth potential

a prominent and ascending trading entity: both a prominent and ascending trading entity: both as a world supplier and a world marketas a world supplier and a world market

PRD will continue to lead in terms of the scale, depth PRD will continue to lead in terms of the scale, depth and sophistication of economic activities in Mainland and sophistication of economic activities in Mainland ChinaChina

Hong Kong will continue to play a pivotal role in the Hong Kong will continue to play a pivotal role in the Mainland’s long-term economic development, but no Mainland’s long-term economic development, but no longer the sole agentlonger the sole agent

Hong Kong remains the preferred international Hong Kong remains the preferred international transportation and logistics hub in Asia, servicing in transportation and logistics hub in Asia, servicing in particular PRDparticular PRD

Need to develop a closer partnership with PRD, and Need to develop a closer partnership with PRD, and further enhance competitivenessfurther enhance competitiveness