China, India, Indonesia: Greatest Magnets for Foreign Investment in Asia
China, India, Indonesia Greatest Magnets for Foreign Investment in Asia
The high-growth economies of China, India and Indonesia are anticipated to play a key role in attracting higher foreign investment in Asia region between 2017 and 2020, according to GlobalData, a data and analytics company.
“With the liberalization of the high-growth nations, greenfield investments in the developing Asian nations witnessed over an 8 percent rise in 2016. This, coupled with a significant improvement in the economic outlook, is expected to spur the investor sentiment over the next three years,” says Arnab Nath, Economic Research Analyst at GlobalData.
An increase in globalization and urbanization is resulting in a shift from the primary (mining, quarrying and petroleum) and manufacturing industries to services in the developing Asian region. Of the total greenfield investments in 2016, 60.2 percent were in the services sector followed by manufacturing (38 percent) and the primary sector (1.8 percent). The liberalization of major economies in the region resulted in greenfield investments in the services and manufacturing sector to rise by 13.6 percent and 1.6 percent, respectively in 2016 whereas greenfield investments in the primary sector witnessed a decline of 29.3 percent during the same year due to lower global commodity prices.
Regional economic partnership to trigger investment impetus
The Regional Comprehensive Economic Partnership (RCEP), which delivers a free-trade agreement among 10 ASEAN economies (Indonesia, Cambodia, Myanmar (Burma), Thailand, Vietnam, Brunei, Laos, Malaysia, Singapore and The Philippines), is expected to be signed this year. The agreement will provide a stimulus for investment across ASEAN countries.