Hong Kong needs more investment to ensure continued economic growth, Hang Sang bank said in its latest economic review released on Wednesday.

The bank said one of the top priorities of Hong Kong should be to improve its investment environment in order to be more attractive to local and foreign investors.

According to the bank, investment activity in Hong Kong has suffered a decline since 1997, though the economy registered a strong 8.1 percent growth in 2004.

However, the fixed capital formation which reflects the level of investment in the economy, showed only a mild upswing of 4.5 percent in 2004.

The fall-off in investment is further reflected in investment as a share of Gross Domestic Product, which fell from 34.5 percent in 1997 to 22.8 percent in 2003.

What's more, between 1997 and 2003, gross fixed domestic capital formation, comprising building/construction and investment in machinery/equipment/computer software, fell by 40 percent from 452 billion HK dollars (58 billion US dollars) to 269 billion HK dollars (34 billion US dollars).

The bank said even a service economy requires sustained investment to produce economic growth. In order to excel in the service sector and to develop Hong Kong along the four pillar industries identified by the government, namely, financial services, producer services, tourism and logistics, continued investment will be necessary.

The bank said Hong Kong should not miss the opportunity to encourage investment by undertaking such measures as the abolition of the estate duty as announced in the budget speech in order to ensure sustained economic growth for Hong Kong.

Hang Seng bank is the second largest listed-bank in Hong Kong in terms of market capitalization.

Source: Xinhuanet