Hong Kong has an unnatural obsession with league tables that measure its competitiveness. In past years officials, pundits and the media fretted over Singapore's apparent ascendancy, chronicled through point-scoring victories in international consultants' reports. Nowadays, Shanghai has emerged as the new nemesis and rare is a week without some comparative study bearing bad tidings. Recent weeks have seen a spate of reports indicating Hong Kong's relative attractiveness as an investment destination. Most make reasonably comforting reading, indicating that harsh cost adjustment has made Hong Kong less expensive than rival investment destinations. Having been one of the most expensive cities in which to run an office, Hong Kong was judged in a recent report to rank ninth, just behind Moscow and only marginally more expensive than Manchester in Britain. Today we report another survey showing that office rents are likely to command only a 50 per cent premium this year over those in Shanghai; in the mid-1990s they were three times as expensive. All this would suggest that Hong Kong is rapidly achieving price adjustment and winning back its competitiveness. The same point is made by the ever upbeat government investment promotion agency InvestHK, which yesterday claimed success in attracting 117 new foreign firms to establish offices in the SAR. This seems to fly in the face of evidence that foreign firms are bypassing Hong Kong and going directly to the mainland to do business. Indeed, the latest figures show the number of foreign offices in Hong Kong to have been static over the last year. Other data paints a less conclusive picture. The foreign direct investment (FDI) flowing into Hong Kong shrank by 37 per cent, to US$13.5 billion (HK$105 billion), in the first nine months of last year compared with the same period a year earlier. Deducing meaningful trends from this potpourri of data is not easy. Hong Kong FDI is something of a misnomer since little is directly invested in the SAR but is booked here for use elsewhere. It also includes proceeds raised by mainland firms in Hong Kong, but to be deployed at home. All of the above tells us much about SAR investment and price trends. However, it reveals little about the SAR's competitiveness, a much misunderstood and misquoted measure of efficiency contrasting output to the cost of provision. Better indicators are the booming SAR service exports, strong re-exports of manufactured goods and strong productivity growth.