1. Hong Kong –World's Freest Economy

2. Hong Kong – key economic data Population6.9 mn (mid-2005) Per capita GDP US$24,100 (2004) Nominal GDP US$166 billion (2004) Total trade in goodsUS$530 billion (2004) Total trade in servicesUS$84 billion (2004) Economic growth 7.3% (2005Q1-Q3) Consumer price inflation 1.0% (Jan-Oct 2005) Unemployment rate 5.3% (Aug-Oct 2005)

3. Hong Kong - a global trading hub Economic freedom and free trade are what make it possible for 6.9mn people to have a high standard of living in a small city with very little natural resources For decades, Hong Kong is at the forefront of globalization

4. “Big market, small government” Excellent infrastructure & flexible markets Good governance and regulatory framework Freedom of entry; open competition; level playing field Business leads, government facilitates Continuous economic restructuring

5. FDI Inflows of 10 Neighbouring Economies in Asia (US$billion) 200220032004 1Mainland China (52.7)Mainland China (53.5)Mainland China (60.6) 2Hong Kong (9.7)Hong Kong (13.6)Hong Kong (34.0) 3Japan (9.2)Singapore (9.3)Singapore (16.1) 4Singapore (5.8)Japan (6.3)Japan (7.8) 5India (3.4)India (4.3)S.Korea (7.7) 6Malaysia (3.2)S.Korea (3.8)India (5.3) 7S.Korea (2.9)Malaysia (2.5)Malaysia (4.6) 8Philippines (1.8)Brunei (2.0)Taiwan (1.9) 9Taiwan (1.4)Thailand (1.9)Vietnam (1.6) 10Vietnam (1.2)Vietnam (1.5)Thailand (1.1) Sources: UN Conference on Trade and Development 2005

6. Latest Inward Investment Data World Investment Report 2005: Hong Kong - 2 nd largest recipient of FDI in Asia, 7 th in world *preliminary figures Sources: UN Conference on Trade and Development 2005 Census and Statistics Department Inflow of FDI in Hong Kong Year2002 2003 2004 2005(Q1-Q2) Amounts (US$billion)9.7 13.6 34.0 19.8*

7. Regional Operations in Hong Kong 2002200320042005 % Change (2004 – 2005) RHQs 9489661 098 1 167+6.3 ROs 2 1712 2412 511 2 631 +4.8 LOs 1 7482 2072 334 2 474 +6.0 RHQs+ROs3 1193 2073 6093 798 +5.2 RHQs+ROs+LOs4 8675 4145 9436 272 +5.5 Source: Report on 2005 Annual Survey of Regional Offices Representing Overseas Companies in HK

8. 3,798 Regional Operation Centres Source: Report on 2005 Annual Survey of Regional Offices Representing Overseas Companies in HK

9. Hong Kong - 10 Key Advantages Rule of law Unrivalled location Low and simple taxes World’s freest economy Clean government Free flow of information World class infrastructure Skilled workforce International lifestyle Gateway to the Mainland

10. Inward investment projects completed by Invest Hong Kong 2002 2003 2004 2005 (Q1-Q3) No of projects:117 142 205 204 About 16% of the completed projects in first 9 months of 2005 involved Mainland investments. Investment projects completed by Invest Hong Kong

11. Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) With the implementation of CEPA, Hong Kong's attractiveness to foreign investors was further strengthened. Out of the 204 investment projects completed by Invest Hong Kong in first 9 months of 2005, -30 companies said they invested because of CEPA -56 companies said it was a contributing factor

12. www.info.gov.hk www.info.gov.hk/hkecon/press/index.htm www.investhk.gov.hk