Hong Kong draws US$4.9 billion in FDI in 2024 with Chinese, US firms leading: InvestHK

UK whisky distiller Macallan, French logistics firm Geodis and Singapore-based loyalty platform Eber are three of the 322 companies that either set up or enhanced their businesses in Hong Kong in the first half of 2024, bringing in HK$38.3 billion (US$4.9 billion) in investment, according to the government agency tasked with attracting foreign direct investment (FDI).

The number of companies expanding in Hong Kong shot up 43 per cent compared with the same period last year, Alpha Lau, director general of investment promotion at InvestHK, said on Tuesday.

FDI grew 6 per cent year on year, while job creation increased 44 per cent with 3,500 new jobs. Mainland China was the top source of companies investing in Hong Kong, accounting for 150 or 47 per cent of the total, followed by the US with 30 new firms or 9 per cent.

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"Hong Kong is an international city that is a springboard for the rest of the world," Lau said. "We are unlike any other Chinese city, and that is why even Chinese enterprises have to come to Hong Kong ... to set up a stepping stone for their goal of establishing international headquarters or to go outside mainland China."

The number of Chinese companies investing in Hong Kong in the first half represents a significant jump, as mainland companies have historically accounted for 35 per cent of the new companies investing in the city, Lau said.

The newcomers include Shanghai-based AI computing firm Biren Technology and Beijing-founded AI driverless technology company Uisee.

With AI and technology firms increasingly seeking to expand beyond China, Lau said more Chinese firms would inevitably be drawn to Hong Kong.

"At the same time, the growth for non-mainland Chinese companies remains healthy," she said. "These companies still use Hong Kong as a springboard into Asia and the rest of China. Hong Kong is a unique hub, and this is why Singapore companies also come to Hong Kong to set up offices."

Notable among the US companies investing during the first half was multi-modal payment network PayCargo, which chose Hong Kong as its regional headquarters.

The UK, Singapore and France were the third, fourth and fifth sources of new businesses investing in Hong Kong, InvestHK said.

The logo of logistics company Geodis is seen on an office building in Frankfurt, Germany, on February 13, 2024. Photo: Shutterstock alt=The logo of logistics company Geodis is seen on an office building in Frankfurt, Germany, on February 13, 2024. Photo: Shutterstock>

In the second half of the year, InvestHK is ramping up its promotion activities in Southeast Asia as well as the Middle East and North Africa, where it sees a "strong pipeline" of prospects.

Beijing's initiative to allow non-Chinese permanent residents of Hong Kong to apply for a five-year, multi-entry travel permit to the mainland, announced on Monday, is also likely to further boost the city's standing as a business hub, Lau said.

"In one day I have already got a lot of very positive feedback from foreign chambers [of commerce]," she said. "It will be even easier for them now to come to Hong Kong and also be able to access China for investment opportunities."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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