Posted on 09/23/2004 12:11:49 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
GENEVA: China overtook the United States as a top destination for foreign direct investment (FDI) in 2003 and the Asia-Pacific region attracted more investment than any other region in the world, a UN report said Wednesday.
China and India were joining Malaysia, South Korea, Singapore and Taiwan as sources of foreign direct investment, it said.
Strong manufacturing industry in China helped the country attract FDI last year worth US53.5 billion (RM214b), compared with US52.7b (RM210b) in 2002, the United Nations Conference on Trade and Development (UNCTAD) said in its annual report on investment flows.
Meanwhile, foreign investment in the United States, traditionally the largest recipient of such money, plunged by 53 per cent last year to reach US30b, the lowest level for 12 years, according to data from UNCTAD's World Investment Report 2004.
Flows to the Asia-Pacific region as a whole rebounded over the year to 107 billion dollars from 94 billion in 2002 driven by strong economic growth and a better investment environment, the agency said.
China was expected to continue to attract foreign companies, analysts said.
"According to our analysis, FDI in China has not peaked although their economic growth rates have fallen," UNCTAD economist James Zhan said.
The outbreak of deadly Severe Acute Respiratory Disease (SARS) had only a marginal downward effect on investment activity as Asia emerged from the decline in foreign investment it had experienced since 2001, the report noted.
"Prospects for a further rise in foreign direct investment flows to Asia and the Pacific in 2004 are promising," UNCTAD's Deputy Sec-Gen, Carlos Fortin, said in a statement.
But the distribution of the new wealth was uneven across the region, with most of the money - US72b (RM288b) - concentrated in north-east Asia.
Flows to south-east Asia rose 27 per cent to US19b (RM76b), while the south merely received RM6b (RM24b) in FDI.
The manufacturing sector remained the dominant factor that pulled investment into China, but a rise in investment in the services industry was noted elsewhere in line with the global trend, UNCTAD said.
Services, including finance, tourism, telecommunications and information technology, formed a growing proportion of foreign direct investment stock in the region - up to 50 per cent in 2002, the most recent figure available, from 43 percent in 1995, UNCTAD said.
UNCTAD said that a growing tendency to shift some business activities overseas to places where labour costs are low but the workforce is skilled helped to raise the region's profile.
Asian companies were also growing in power and reach as investors in other regions, according to the Geneva-based agency.
Asian firms, such as Hutchinson Whampoa of Hong Kong, Singapore's Singtel and Samsung of South Korea, again dominate the UNCTAD list of the top companies from the developing world. - AFP
I'm also well aware that those conservative principals of self-reliance and self-sufficiency are an anathema to you. You would prefer to shackle our nation with dependency on foreign supplies of goods. That is why you denigrate the "protectionists" of national security.
You really ARE low, Joe. Very, very low.
Why not mention limited government too, Willie? Afraid to go that far?
It is thoroughly amazing that throughout history this argument has come about thousands of times. Whether to isolate and be in total autarky. Or, to exchange something of value - something that you have a surplus of - with someone else - who also has a surplus of some good - so that you, as a consumer, can have more of a diversity of products for consumption. If it works in your neighborhood, why is it not good on the world stage...unless of course you must discriminate against trading with someone who looks different from you.
It is quite interesting that you can not provide evidence of these actions subverting national sovereignty...what will you do now; site the WTO with their non enforceable legal powers? Let's ask one other question, Willie? Do trading partners tend to be more or less at conflict with each other? You may have to try thinking like a rational person to answer this one.
So, in answering my question the way you did; does that mean that you prefer not having any trade at all?
Nothing that extreme. Trade our surpluses for what we're incapable of producing.
There is a heck of a lot of investment in China. In 1983, when I first set up a factory there (selling into the Chinese and Asian markets, not back to the U.S.), 40 other companies set up shop in the same city.
Now the numbers of new factories in that city can be counted in the hundreds.
These are not shabby operations either. Very new, clean and proper facilities. Any small town in Ohio or Pennsylvania would drool at the chance to have just one of those factories set up in their town.
It is definately a different place to do business. But, it was generally easier to operate in China than I found it to be in the U.S. The paperwork regulations in the U.S. make even Chinese accounting regulations look like childs play.
The Chinese want your business and the welcome mat is out. The U.S. needs to get out that welcome mat and replace the comparatively hostile U.S. business climate.
[ tend to service the machines that make the goods rather then make the goods directly]
Don't the machines and the servicing labor force need to be in the same location?
I'll let the fact that you contradicted yourself slide. This revelation of your's is progress.
OK, what if we are capable of producing everything but some of those things are much more costly (in terms of labor) to produce in relation to other things that can be produced - things that bring consumers much more utility (satisfaction)? What if we couldn't possibly produce everything to meet the preferred domestic demand? Should we choose to skimp on things just because we're capable of producing everything but abhor someone else doing it for us more cheaply?
Yes!!! My point is that we are indeed still making stuff here. We do it with less labor than ever. I looked at my post again and don't thing that I left the impression of anything else otherwise.
Liberals are hostile to economic self-sufficiency - so strongly, that they believed in war to 'open up markets'. The most famous example is the Opium War, when Britain forced the Chinese Empire to allow the import of opium. This liberal belief in market expansionism has revived after the end of the Cold War.
--Liberalism, market, ethics
Have you seen "The Terminal". = Have you seen "The Terminal"?
I guess you can say I am too close to the situation? Folks that I worked with in Hong Kong were leaving and none too happy about the hand-over. Taiwan will be the deciding factor, that and their overt flaunting of international trade laws regarding patent and copyright infringement.
just like Thailand was the top choice in 1996
does this mean Willie is angry that foreigners arent investing here anymore?
Hey, if you have first or second hand knowledge, then you are much more familiar with the inner-workings of China than I am. I'm just going off of the things I read in business oriented publications and my belief that the "capitalism genie" will not want to go back to its bottle.
Thanks for the info as I wasn't clear on the meaning of "foreign direct investment". However, I did find the following definition of it at http://economics.about.com/cs/economicsglossary/g/fdi.htm:
Definition: FDI stands for Foreign Direct Investment, a component of a country's national financial accounts. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. Foreign direct investment is thought to be more useful to a country than investments in the equity of its companies because equity investments are potentially "hot money" which can leave at the first sign of trouble, whereas FDI is durable and generally useful whether things go well or badly.
Hence, it doesn't include investments in stocks and is, as you said, usually thought to be more useful. It is interesting (and a bit disturbing) to see foreign direct investment going down so sharply. I would be interesting to know where the U.S. dollars dispersed via our trade deficit are going instead of to direct investments.
Despite the administration's ballyhooed hype of tax cuts and claims that our economy is more "productive", the dropoff in foreign direct investment is direct proof that our domestic economy has become more hostile to business investment. Yes, this IS a direct result of administration policies that favor outsourcing and offshore investment. The administration is actively engaged in economic warfare AGAINST our domestic industries and the prosperity of the American Middle Class that they employ.
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