Southeast Asia overtakes China in FDI

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FlagsASEANSoutheast Asia overtook China in inward foreign direct investments (FDI) last year as China’s workforce peaked and wages increased, according to the Bank of America Merrill Lynch.

The region’s lead over China may widen in the coming years as Southeast Asia’s growing population and lower wage levels attract more investments, Bank of America Merrill Lynch said in a report on Wednesday.

Data compiled by Merrill showed FDI into Indonesia, Thailand, the Philippines, Malaysia and Singapore climbed 7 per cent to $128.4 billion last year, surpassing the $117.6 billion amount received by China.

FDI into China, based on official FDI utilised, reached a peak in 2011 at $124 billion and has declined slightly since, Merrill added.

“Rising FDI into ASEAN will likely remain a favourable structural trend over the next few years given favourable demographics, competitive wages and geopolitical competition between the superpowers,” Merrill said, alluding to tensions between China and Japan.

A drop in China’s working-age population is robbing President Xi Jinping of an engine of three decades of growth, even as it helps the government restructure the economy away from investment and manufacturing-led expansion.

The situation is reversed in Southeast Asia’s developing nations, where rising numbers of young people seek employment, luring firms seeking a cheap workforce and new markets.

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Reading Time: 1 minute

Southeast Asia overtook China in inward foreign direct investments (FDI) last year as China’s workforce peaked and wages increased, according to the Bank of America Merrill Lynch.

Reading Time: 1 minute

FlagsASEANSoutheast Asia overtook China in inward foreign direct investments (FDI) last year as China’s workforce peaked and wages increased, according to the Bank of America Merrill Lynch.

The region’s lead over China may widen in the coming years as Southeast Asia’s growing population and lower wage levels attract more investments, Bank of America Merrill Lynch said in a report on Wednesday.

Data compiled by Merrill showed FDI into Indonesia, Thailand, the Philippines, Malaysia and Singapore climbed 7 per cent to $128.4 billion last year, surpassing the $117.6 billion amount received by China.

FDI into China, based on official FDI utilised, reached a peak in 2011 at $124 billion and has declined slightly since, Merrill added.

“Rising FDI into ASEAN will likely remain a favourable structural trend over the next few years given favourable demographics, competitive wages and geopolitical competition between the superpowers,” Merrill said, alluding to tensions between China and Japan.

A drop in China’s working-age population is robbing President Xi Jinping of an engine of three decades of growth, even as it helps the government restructure the economy away from investment and manufacturing-led expansion.

The situation is reversed in Southeast Asia’s developing nations, where rising numbers of young people seek employment, luring firms seeking a cheap workforce and new markets.

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