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Asian Countries Expect More Chinese Investment Overseas
China will continue to be the most attractive Asian market for foreign investors, while entry into the World Trade Organization (WTO) could encourage it to invest more in its neighbors, said a group of economists participating in the ongoing East Asia Summit 2001 Tuesday.
Capital goes where there are potential returns, Victor L. L. Chu, chairman of the Hong Kong-based First Eastern Investment Group, said. For now, China is the magnet for foreign direct investment but its upcoming WTO membership may jog Chinese companies into venturing overseas, Chu said. And Asia will be at the forefront for Chinese investment overseas.
Chu said the Asian region could also benefit from a reconfiguration of international investment portfolios that will want to reduce their exposure to the U.S. and Asian companies need to beef up their infrastructure so that when this shift does occur they will be ready.
Asian countries can get an edge over China by developing proprietary high-tech products and services and providing a high-tech infrastructure for investors, Clyde V. Prestowitz, president of the U.S.-based Economic Strategy Institute, maintained.
However, Prestowitz said, China will continue to be alluring to big investors for it offers huge opportunities.
The economists to the summit believed that with the uncertainties of returns exacerbated by the fallout from the September 11 attacks in the U.S., Asia has to offer great risk butgreat opportunity. The good news is that private equity has never been more available in the region, they said.
Private equity funds in Asia, excluding Japan, total 46 billion U.S. dollars, and going by current rates of investment, there will be 5 billion to 6 billion U.S. dollars available each year.
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