Leading Japanese businessmen in Hong Kong remain confident about investing in the territory, even though a number of Japanese firms withdrew from the former British colony during the Asian financial crisis, Japan's chief representative in Hong Kong said Wednesday.
Itaru Umezu, consul general in Hong Kong, also anticipated that Japanese companies will regain influence in the territory after Japan's economic recovery and China's accession to the World Trade Organization.
"I firmly believe that the economic recovery in Japan coupled with China's entry into the WTO will trigger renewed influence by Japanese companies in Hong Kong," Umezu told a forum organized by the Japanese Society of Hong Kong.
He said some Japanese banks and department stores left Hong Kong during the regional financial crisis mainly because of their economic problems in Japan.
The Hong Kong Monetary Authority said the number of Japanese banking institutions in Hong Kong had dropped from 91 in March 1997 to 35 by June this year.
The Japanese banks' market share of loans in Hong Kong has decreased to around 25 percent from 51 percent in 1997.
But despite the departure of some Japanese banks, Hong Kong still had Japanese banking assets of HK$1.8 trillion (249.48 billion yen) at the end of 1999, the largest figure for overseas banks in Hong Kong, Umezu said.
Japan remains Hong Kong's third-largest trading partner and the largest investor in the territory's manufacturing sector, he said.
But Umezu cautioned Hong Kong on its high operating costs and environmental pollution, which may undermine any competitive edge of the territory. At present, more than 2,000 Japanese companies operate in Hong Kong and employ about 100,000 Hong Kong people.