Foreign direct investment (FDI) inflows to East Asia and South-East Asia in 2012 dropped by 5 percent to US$326 billion, UNCTAD’s World Investment Report 2013 reveals.
FDI to East and South-East Asia declined as a result of falls in major economies in the region, including those of China, Hong Kong (China), Malaysia, and the Republic of Korea, the report notes. The decline was both in cross-border mergers and acquisitions (M&As), and in greenfield investments – meaning investments in industries or sectors that are new to the recipient countries. M&A sales contracted in 2012 by about 37 percent, to US$23 billion, while the total level of recorded greenfield investment deals decreased by 28 percent.
China continues to be the leading FDI recipient in the region, as well as in the developing world. FDI inflows to the country dropped by only 2 percent in 2012, remaining high at US$121 billion, despite strong downward pressure on FDI in manufacturing caused by rising production costs, weakening export markets, and the relocation of foreign firms to lower-income countries.
As labour-intensive industries have experienced a considerable wave of relocation, the Chinese manufacturing sector as a whole has been upgrading. Both domestic and foreign investments are increasingly targeting high-technology industries, such as advanced electronics components. In addition, an increased number of foreign-invested research and development (R&D) centres – about 1,800 by the end of 2012 – demonstrates that FDI has helped China enter into more advanced activities along global value chains.
Hong Kong (China), the second largest FDI recipient in East and South-East Asia, saw a 22 percent decline in inflows in 2012, to US$75 billion. FDI inflows to the Republic of Korea dropped slightly – by 3 percent – to US$10 billion, while those to Taiwan Province of China turned positive, going from a negative US$2 billion in 2011 to US$3 billion in 2012. Inflows to Mongolia declined, but remained at a level above US$4 billion thanks to foreign investment in mining. However, FDI prospects in that sector have become uncertain, as a dispute looms between the national government and foreign investors.
The 10 member States of the Association of Southeast Asian Nations (ASEAN) saw an overall 2 percent increase in FDI inflows in 2012, partly as the result of a large amount of inflows (up by 1.3 percent up to US$57 billion) to Singapore, the subregion’s leading FDI target.
Meanwhile, relatively low-income countries in South-East Asia seem to be a bright spot for FDI. Inflows to Cambodia, Indonesia, Myanmar, the Philippines and Vietnam continued to grow in 2012. These countries have received an increasing amount of FDI driven by the wish of investors to reduce costs for labour-intensive manufacturing, to harvest mineral resources, and to participate in infrastructure projects. For example, Chinese investment in infrastructure has been increasing in countries such as Indonesia and the Lao People’s Democratic Republic, providing new dynamism to intraregional FDI in infrastructure.
Thailand continued to attract higher levels of greenfield investment in 2012, particularly in the automotive and electronics industries. Some car manufacturers, especially Japanese transnational corporations (TNCs), have been strengthening and expanding their operations in Thailand. In general, TNCs from Japan and elsewhere are boosting their FDI in South-East Asia because of regional integration, good economic prospects for the ASEAN economic community, and emerging opportunities in low-income countries. In the case of Myanmar, foreign investment in extractive industries has contributed to a major share of capital inflows. This trend is expected to continue.
Total outward FDI from the region of East and South-East Asia in 2012 rose by 1 percent to US$275 billion against the backdrop of a sharp decline in worldwide FDI outflows. In East Asia, outflows from China continued to grow, reaching a record US$84 billion in 2012. The country is now the world’s third-largest source of FDI. FDI outflows from Taiwan (China) increased slightly, to US$13 billion, while those from the Republic of Korea rose by 14 percent, to US$33 billion. Large investments in high-end segments of the electronics industry in China were one of the main drivers of rising outward FDI from these two economies.
FDI outflows from the ASEAN countries increased by 3 percent during the year, although outflows from Singapore, the leading source of FDI in the subregion, declined by 12 percent to US$23 billion. By contrast, outflows from Malaysia rose by 12 percent, to US$17 billion, and outflows from Thailand climbed by 45 percent, to US$12 billion. The rise of these two countries as FDI sources was mainly driven by intraregional investments.
PV
Đăng ký: VietNam News
