HONG KONG was highlighted by the World Bank yesterday in an unprecedented recognition of its status as a global market and a financial gateway to Asia, in particular to China. In what is an unusual focus on Hong Kong, and despite it having only observer status and no membership in the World Bank, the Hong Kong Stock Exchange, in particular, was accorded much of the credit for ensuring the mainland was one of the biggest recipients of private financing flows in 1993, and the largest beneficiary of foreign direct investment. Hong Kong also was credited for the 'enormous' development of its debt market between 1992 and 1993, and for a banking system which had served to make it 'a net supplier of funds to most of the world'. The plaudits come at a time when the Hong Kong Monetary Authority (HKMA) has been lobbying the World Bank to issue long-term bonds in Hong Kong which mature after 1997, an act which HKMA chief executive Joseph Yam Chi-kwong regards as a symbolic act of faith in the territory after the handover. Hong Kong is to host an International Monetary Fund/World Bank meeting in September 1997. Comments on the territory appear in the World Bank's latest annual world debt tables report, regarded as the most accurate measure of developing country investment and debt flows. The total net resource flows to China in 1993 amounted to US$41.24 billion (HK$319 billion), of which US$25.8 billion was foreign direct investment, US$12.79 billion was net flow of long-term debt, US$2.27 billion was portfolio equity flows, and the rest technical and non-technical co-operation grants. The world debt tables pinpoint, in particular, the rapid growth in liquidity of the Hong Kong Stock Exchange, whose market capitalisation has grown from US$85 billion in 1990 to US$385 billion in 1993. 'The sharply expanded secondary market activities have made the Hong Kong Stock Exchange one of the world's most liquid bourses: value traded was US$132 billion in 1993,' the report stated. It also stated that Hong Kong was used by portfolio investors in Asia who invested only in capital market instruments because of its proximity to the region and its offshore status. It was also recognised for its ability to attract mainland companies that floated equity issues in the liquid Stock Exchange in Hong Kong. In terms of foreign direct investment flows into China, the territory was also credited for nearly 60 per cent, or US$20 billion, of cumulative actual investment flows into the mainland from 1979 to 1992. Similarly, the Hong Kong dollar sector is recorded to have grown by 40 per cent in 1993, attributable to greater efficiency in the clearing of all Hong Kong dollar debts.