Jake's View

InvestHK cooks up the perfect candidate for public relations ceremony

PUBLISHED : Sunday, 08 September, 2013, 12:00am
UPDATED : Sunday, 08 September, 2013, 1:52am

InvestHK, the government agency tasked with attracting foreign investors, has completed 3,000 projects that have brought HK$79 billion to the city since its establishment in 2000.

South China Morning Post,
September 5

And that 3,000th one just happened to be ASB Biodiesel, a Middle East-financed company that has built a plant in Tseung Kwan O to collect used cooking oil from restaurants and reprocess it into diesel fuel.

Could you possibly find anything more politically correct? How very fortunate for InvestHK that this one turned up just when it did.

I mean, imagine that No. 3,000 had been a shop selling Italian lingerie. Putting a few licks of paint into rented shop premises in order to sell mainland tourists overpriced European fashion goods also counts as a Hong Kong investment project. But it wouldn't be quite the right flavour for the ceremony, don't you think?

So there must have been a real sigh of relief in InvestHK's Fairmont House offices as the numbers ticked up to 3,000. What would it be? Please, please, let it be something that really looks good. And as luck would have it, No. 3,000 was ASB Biodiesel. Wasn't that just wunnerful?

Of course, we shall forget that ASB Biodiesel has been round for some time and actually started work on that plant in 2009 but stopped construction in 2011 for almost two years amid whinges that the thing wasn't worthwhile if it didn't get government support. Oh well, you know the story.

It's in line with this claim, made at the ceremony by InvestHK's top man, Simon Galpin, that, "We're on track to have a record number of mainland companies using Hong Kong as their platform to go global, so there's no indication of a slowdown in terms of companies coming to Hong Kong at all".

I now refer you to the chart on InvestHK's own measuring stick of its performance. The red line represents the number of regional headquarters and regional offices operating out of Hong Kong. That was 3,798 in June 2005 and 3,883 in June last year, the latest figure available. We are looking at a compound annual growth rate of 0.3 per cent. Big win. Way to go. No indication of a slowdown at all.

The growth has all been in what they call "local office" - the blue line on the chart - which is a pretty wide category and includes things like Italian lingerie chains investing in a lick of paint to overcharge their customers here.

And now let's consider the HK$79 billion invested here by InvestHK clients since 2000. Was that all foreign money? Did our local banks in Hong Kong not get even a look-see at providing a few loans? That would not be a very creditable reflection on our banking industry.

But assuming that our banks did participate - a safe assumption - we can hardly call it all foreign investment when our own bank deposits made up a fair proportion of it. How much was really foreign investment, Mr Galpin?

Not that it actually matters. One thing Hong Kong doesn't really need is foreign investment capital. We have a surfeit of the stuff at home. We're one of the world's biggest net providers of investment capital. All that we do by bringing more in is put unnecessary pressure on the peg to the US dollar.

Ditto jobs. Our unemployment rate is down to 3.3 per cent, which is effectively full employment. Create yet more jobs and mine host at the restaurant my wife and I regularly favour will just tell me again that he has trouble finding waiters.

But he can now let ASB Biodiesel have his used cooking oil. Big win.