Hong Kong remains the preferred destination for foreign direct investment (FDI) in Asia despite its nagging problems of air pollution and unbalanced industrial structure.

Census and Statistics Department figures released yesterday showed the first quarter saw an inflow of HK$102.6 billion, more than a third for the whole of last year.

The figures released by Invest Hong Kong (IHK) showed a total of 156 investment projects were introduced in the first quarter, 13 percent of which were from the mainland and more than half from North America and Europe.

Investment projects ushered in by IHK were worth over HK$6.82 billion and would create more than 4,285 jobs in the city. IHK is reported to have already created 1,699 jobs. It will create 2,586 more in the next two years.

But Hong Kong has to maintain its existing atmosphere that meets overseas companies' investment criteria, both geographically and financially, instead of just attracting FDI, assistant professor of Hong Kong Polytechnic University's Department of Management and Marketing Zhang Xubing said.

"Hong Kong has long been well-known for its geographical advantages and dynamic system of doing business. Hong Kong is almost a good brand name for that, and that's why it remains an attractive location for companies from all over the world...," he said.?

"But concerns such as air pollution and industry marginalization that have arisen in recent years may discourage investors to commit themselves further.

"Besides the clean air issue, there are other things to do to strengthen Hong Kong's competitiveness, such as improving the education system and even locals' language proficiency," he said.

Hong Kong Chief Executive Donald Tsang addressed a FDI delegation yesterday, saying: "We are aware of the problem and (we) are taking active steps to deal with it."

Tsang appealed to Hong Kong's business community, including international companies doing business here, to do their bit to ensure that manufacturing operations in the Pearl River Delta region were as environmentally friendly as possible.

"Everything in the character of Hong Kong people reassures me that our community will remain alert both to dangers and opportunities. Our community never idles. Nor will our government," Tsang said.

Of the 156 completed projects, 22 percent are from the consumer, retail and purchase sector and 13 percent from business and professional services.

One of the firms to invest in Hong Kong is Planet Payment. A New York-based company engaged in tourists' payment clearance, it opened its regional office in Hong Kong at the end of last year with an initial investment of over HK$1 million and hopes to cash in on the mainland market.

"We have our presence in Singapore for years. Now in a bid to tap the mainland market, we have opened a new office in Hong Kong," Planet Payment senior vice-president for corporate development Thomas DeLuca said.

Planet Payment's Hong Kong office is in Mong Kok with a team of eight employees, DeLuca said.

(China Daily HK Edition July 12, 2006)