UN World Investment Report 2010 - Office of Trade Negotiations

42
Figure II.3. FDI flows between ASEAN
and China, 2000–2009
(Millions of dollars)
6 000
5 000
4 000
3 000
2 000
1 000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
FDI from ASEAN to China FDI from China to ASEAN
Source: UNCTAD, based on Chinese FDI data from MOFCOM
(China, Ministry of Commerce).
Note: In 2009, Chinese FDI in non-financial sectors in ASEAN
was $2.3 billion (Source: MOFCOM).The total amount
($2.8 billion) is based on UNCTAD estimates.
tion operations to ASEAN countries, such
as Cambodia, Indonesia and Thailand. As
intraregional FDI flows in manufacturing
continue to increase, those in related services,
such as finance and infrastructure,
are expanding as well. 18 ICBC (China), for
example, has recently acquired a number of
banks in South-East Asia – including ACL
Bank (Thailand) and Halim Bank (Indonesia)
– partly to serve Chinese overseas investors;
and Taekwang Industrial (Republic of
Korea) is investing $4.5 billion in a power
plant in Viet Nam.
China plays a multifaceted role. While the
contribution of Japan as a major driver of industrial
upgrading and economic growth has
been declining and the strength of the NIEs
as a whole has been relatively weakened by
the recent crisis, China’s role in the region
has expanded (table II.6). 19 The country plays
a multifaceted role in the current process
of industrial restructuring and upgrading
World Investment Report 2010: Investing in a Low-Carbon Economy
in Asia: (a) it continues to be attractive to
market-seeking FDI, but the coastal region
becomes less attractive to labour-intensive,
efficiency-seeking FDI due to the rising costs
of production (WIR08; WIR09); (b) it has
become an important source of capital and
technology for neighbouring, low-income
countries; (c) within China, a new round of
industrial upgrading is taking place, with
significant implications for the development
trajectories of both China and other
countries in the region. Some low-end,
export-oriented manufacturing activities
have been shifting from coastal China to
a number of neighbouring countries, while
efficiency-seeking FDI in coastal provinces
of China has been upgrading to high-end
products, and market-seeking FDI has been
increasingly targeting the inland regions
(Zhan, 2009). Due to its economy’s size and
growth potential, China is becoming a key
force that could shape the region’s production
landscape in the years to come.
To conclude, a broader and more complicated
pattern of industrial upgrading has been
emerging in South, East and South-East Asia.
As in the past, the pattern will keep evolving.
The future direction will be determined by
various factors at different levels, including,
among others, the changing strategies
and practices of TNCs in their internationalization,
the technological progresses and
institutional changes which shape the global
industrial and competitive landscape, and the
long-term implications of policy responses
to the various challenges for the region as
well as for the world at large, such as the
global macroeconomic imbalance, 20 energy
security and climate change.