ong Kong is retaining its status as the dominant location for Asia-Pacific regional offices for multinationals, but it must address some drawbacks to remain competitive in the future. These include pricey office space, sub-par air quality due to all the manufacturing on the nearby Chinese mainland and the need for more international school capacity.
   "The government is aware of these challenges and is working to address them," noted Mike Rowse, director-general of investment promotion at Invest Hong Kong, at the time an annual survey of companies in Hong Kong representing parent companies located outside Hong Kong was released in 2007. The survey was conducted by the Census and Statistics Department of the Hong Kong SAR Government.
   "Of the 6,440 companies in Hong Kong representing parent companies located outside Hong Kong, 3,890 are regional offices or headquarters," noted Rowse. "This is an all-time high." How many?
   As of June 2007, Hong Kong claimed 1,246 regional headquarters, 2,644 regional offices and 2,550 local offices representing their parent companies outside Hong Kong. These offices employ approximately 346,000 people in Hong Kong, or about one in 10 of the working population.
   Survey participants were asked to list the factors that most influenced their decision to locate their regional offices in Hong Kong. In order of importance to the respondents are these: (1) a low and simple tax system; (2) free flow of information; (3) absence of exchange controls; (4) corruption-free government; (5) communication, transport and other infrastructure; (6) free port status; (7) geographic location; (8) availability of business services and professional support services; (9) rule of law and independent judiciary; and (10) political stability and security. Three quarters of the survey respondents said Hong Kong's business environment had stayed the same or improved since the previous year.    Industries of all stripes are behind the SAR's regional office and headquarters numbers. German biotech company Qiagen, for example, opened its regional office in July 2007, citing the need to be part of Hong Kong's rapidly growing bioscience industry. The company provides biomedical research and molecular diagnostics for academic research markets, pharmaceutical and biotech companies.
   "We are building a team and infrastructure to support scientists and physicians in local universities and hospitals to discover disease mechanisms and develop cures for them," explains Dr. Frauke Ehlert, Qiagen's general manager for China and Hong Kong. Among other tasks, the new office will oversee distribution of products made on the Chinese mainland to destinations worldwide. "This [new office] underlines our commitment to Hong Kong as an important hub for life science and healthcare."
   Dassault Aviation announced in July that it would establish its regional headquarters in Hong Kong, to be known as Dassault Falcon Jet Corp. The new unit seeks to play a role in Asia's growing aviation and aerospace industries; the company already operates an office in Kuala Lumpur, Malaysia.
   "There has been a brisk market for business jets in Asia over the past couple of years, particularly in Hong Kong and Malaysia," says John Rosanvallon, president and CEO of Dassault Falcon. "Mainland China is of particular interest," he adds. "With its growing international importance and the rising demand for new aircraft, we are confident that we are in a strong position to not only take advantage of market growth, but also to service our fleet of aircraft in the region."