Despite a 14.96% decline in the number of projects in Asia-Pacific in 2012, it was still the leading world region, attracting 3740 projects with a 31.72% global market share. As in 2011, China, India and Singapore were the three leading countries for inward FDI, attracting more than half of all projects in Asia-Pacific. This was despite FDI in China and India falling sharply by 27.05% and 20%, respectively.
This is according to data from crossborder investment monitor fDi Markets which was published in The fDi Report 2013, an annual report from fDi Intelligence.
Several countries from the region achieved growth in FDI in 2012. The resilient economies of Australia, Indonesia and the Philippines helped secure solid growth in FDI, despite the testing global conditions. The volume of FDI into Myanmar grew massively in 2012, as political and economic reform coupled with improving international relations seemed to transform the country’s investment environment. Project numbers increased from 10 to 54 and the country also saw significant increases in capital investment (151.94%) and job creation from FDI (157.20%).
Bangladesh also achieved a sharp rise in the levels of inward FDI in 2012; projects increased by 66.67%, while capital investment and jobs created also increased significantly.
Outward FDI from Asia-Pacific decreased in 2012 in line with global trends. Project numbers fell by 18.52%, capital investment decreased by 17.73% and job creation fell by 27.12%. Japan was still the dominant investor from the region and although the number of outward FDI projects from Japan fell, its market share of FDI from Asia-Pacific increased from 34.57% in 2011 to 37.37% in 2012. This reflects Japanese companies’ accelerating FDI plans, despite global market conditions, as a result of the natural disasters in Japan and the revealed risk of centralising too many strategic activities in Japan. China and India were the next major sources for FDI in 2012, although they both saw project numbers, capital investment and job creation decline sharply in 2012.
Business and financial services was the leading sector again for FDI projects in Asia-Pacific in 2012, with 923 projects in the sector. While there was a decrease in absolute terms, the sector increased its market share of FDI into Asia-Pacific from 21.92% in 2011 to 24.68% in 2012. ICT was the second largest sector for FDI into Asia-Pacific, with 665 projects in 2012 – a 3.42% increase
There was also solid growth in FDI in transportation, warehousing and storage, with the number of projects increasing by 6.15% in 2012 to 259. The sector replaced engines, turbines and industrial machinery as the fourth largest sector for FDI into Asia-Pacific in 2012. Many capital-intensive sectors including engines, turbines and industrial machinery; transport equipment; and chemicals, plastics and rubber, suffered from the slowdown in the Chinese economy and recorded significantly lower FDI in 2012.
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