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China not A Threat to Southeast Asia in Fight for Foreign Investment: Newspaper
China is not a threat to Southeast Asia in fight for foreign investments and foreign direct investment flows to China and other parts of Asia, but tend to be complementary rather than competitive, Singapore English newspaper The Business Times said in a report Monday.
Quoting a study by the U.S. securities house Salomon Smith Barney, the paper said that "Asian policy-makers are so fixed that they fail to see the real threat in the competition for foreign investments" and "that threat comes from emerging markets out of Asia -- in particular, the economies of Latin America and Eastern Europe."
Foreign direct investment (FDI) flows into Latin America jumped four times to nearly 80 billion U.S. dollars last year from 1985 and those into Asia only about doubled to 120 billion dollars during the period, the paper cited, noting investors' confidence in Latin America, especially Brazil and Mexico, has bounced back in recent years.
"Foreign direct investment flows to China and the other major sub-regions of Asia tend to be complementary rather than competitive," the paper quote the study as saying.
The paper quoted the study as giving out three reasons to support its view point that FDI flows into China and the rest of Asia is -- and will continue to be -- complementary rather than competitive. These reasonings are:
-- Asian economies are at different stages of development and tend to specialize in the production of different types of goods, and FDI flows thus may be drawn to difference comparative advantages in the region -- some time to abundant labor, other times to technological know-how.
-- Recent capital flows along the global production chain seem often motivated by a desire to be closer to end-customers and various other suppliers or partners, thus there is an incentive to diversify FDI placement if the ultimate marketplace in Asia is dispersed.
-- The WTO is likely to open up China and boost its economic growth which, in turn will generate more trade for the rest of the region.
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