Hong Kong was the world's fourth largest foreign direct investment recipient last year, up from its ninth position in 2008, according to the World Investment Report 2010.

It was the first time Hong Kong had gained fourth place in the global rankings. For the 12th consecutive year Hong Kong continued to be the second largest foreign direct investment recipient in Asia, after the Mainland.

Although the global financial and economic crisis drove global foreign direct investment inflows down by 37% in 2009 versus 2008, the impact on Asia was less profound.

The US$48.4 billion foreign direct investment inflows to Hong Kong, for example, represented a 19% drop. Hong Kong's share of foreign direct investment inflows into Asia held up at about 21% in 2009, similar to 2008.

In terms of foreign direct investment stock, Hong Kong ranked the highest in Asia, enjoying a majority share of 37%, or US$912.2 billion in 2009. This represented a 12% rise on 2008.

Rapid recovery in Asia

The report highlighted Asia's rapid recovery in foreign direct investment flows compared to the more gradual improvement in global numbers. In the first quarter, foreign direct investment inflows to Hong Kong, for example, amounted to US$20 billion, representing significant growth of 72% on the same quarter last year.

Director-General of Investment Promotion Simon Galpin said Hong Kong's status as an international economy is reflected in this record-high ranking.

"With Hong Kong positioned at the heart of Asia and as the gateway to China, it is benefiting from the region's economic recovery.

"Foreign direct investment is important to Hong Kong's economy, bringing in new technology, transferring soft skills and creating jobs. We are committed to upholding the advantages of Hong Kong to maintain its competitive position as a business location.

"Measures such as CEPA, the growing network of Double Taxation Agreements and positioning Hong Kong as the offshore centre for renminbi trading all support the city's role as the preferred investment destination for foreign and Mainland companies."