Throughout 2011, several major US retailers including Home Depot, Target and Wal-Mart, announced that they would open factories in Asia-Pacific, with India and Vietnam being the key destinations. fDi Markets shows that in the Asia-Pacific region between January 2003 and November 2011, China has attracted by far the most manufacturing projects, with India and Thailand attracting the second and third most, respectively. However, there has been a steady decline in the number of new manufacturing projects initiated in China of late. In 2004, there were 689 such projects, but in 2011 there were only 449.
Other countries in the Asia-Pacific region have shown increases in the number of manufacturing projects they are attracting. In Cambodia, for example, more than one-third of the projects into the country between January 2003 and November 2011, were announced in 2011. India also experienced its best year in terms of number of FDI projects in the manufacturing sector in 2011.
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In terms of capital expenditure, more than 50% of the total FDI invested into Uzbekistan's manufacturing sector between January 2003 to November 2011 was invested in 2011. Indonesia also experienced its best year for capital expenditure in the manufacturing sector in 2011, attracting $16bn.
China has also seen a decline in the number of jobs created as a result of FDI. Meanwhile in 2011 countries such as Vietnam, Indonesia, Taiwan, Kazakhstan and Uzbekistan all saw a higher than average number of jobs created as a result of FDI.
According to fDi Markets, Japan is the largest source of FDI projects into Asia-Pacific, with the US the second largest source and Germany the third.The number of projects from European companies were lower in 2011 than in previous years, which may reflect the ongoing eurozone crisis. If that is the case, project numbers may continue to decline in 2012.
China is emerging, however, as an investor in the Asia-Pacific region, initiating 38 projects in 2011. A possible reason for the increase in overseas investment is that China is experiencing increased costs, a high rate of inflation and a shortage of labour in coastal areas in its domestic market.