Hong Kong remains Asia's second largest and the world's seventh largest foreign direct investment (FDI) recipient, attracting US$63 billion inward investment in 2008, according to the United Nations Conference on Trade & Development.

The amount represented a 15.9% year-on-year increase in spite of the global financial and economic crisis which has caused FDI inflows to some developed economies to halve.

Hong Kong also continues to have the highest FDI stock in the region amounting to nearly US$835.8 billion.

These figures were included in the Conference's World Investment Report 2009 released today, which said the Mainland is still ranked first in the Asia Pacific region in FDI inflows and has moved up four places to be the world's third largest recipient, attracting US$108.3 billion last year, up 29.7% on 2007.

However, the performance of the major economies in the region in attracting FDI varied significantly. FDI inflows to Hong Kong, the Mainland, India and South Korea increased, but fell sharply in Singapore and Taiwan.

Globally, FDI inflows dropped 14.1% last year, from a historic high of US$1.98 trillion in 2007 to US$1.7 trillion.

Developing and transition economies accounted for 43% of global FDI last year. This change in the pattern of inflows is partly due to the large decline in FDI inflows to developed countries, which shrank by 29% compared with 2007.

The report also says the slide in FDI has continued this year. Preliminary data for 96 countries suggest inflows fell a further 44% in the first quarter compared with the same period last year.

The conference forecast global FDI inflows will fall to below US$1.2 trillion, with a slow recovery in 2010 and should speed up in 2011.

Director-General of Investment Promotion Simon Galpin cautiously welcomed the results and said Hong Kong must work doubly hard to encourage businesses to expand in Hong Kong during these uncertain times.

"We believe overseas, Mainland and Taiwanese businesses will continue to set up and expand in Hong Kong because of our strategic location. Hong Kong is the ideal two-way platform for overseas companies to do business in the region and for Mainland enterprises to develop their international business interests," he said.