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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ EXPORTS TO ASIA PER CAPITA 1998 (C $) 0 500 1,000 1,500 2,000 2,500 38 Canada BC Saskatchewan Alberta Manitoba Newfoundland New Brunswick Nova Scotia Ontario Quebec PEI Yukon/NWT Sources: Adapted from Statistics Canada, Exports by Country, January to December 1998 (Cat. No. 65-003, Vol. 55, no. 4). The most puzzling discrepancy in investment data is in the figures for Indonesia. Statistics Canada records total cumulative Canadian investment in Indonesia in 1997 at $1.98 billion. Figures gathered in Indonesia by the Canada-Indonesia Business Development Office, an offshoot of the Alliance of Manufacturers and Exporters Canada, placed investment at $8.16 billion, a significant discrepancy. A considerable part of this can be explained by differing definitions: Indonesian figures record the total value of companies with a significant Canadian investment, including the non-Canadian stake. The Canadian figures record only the direct Canadian investment. But even deflating the Indonesian figure by two-thirds leaves a sizable gap between the Canadian and Indonesian-sourced figures. In South Korea, Canadian figures put the FDI total at $172 million in 1997. South Korean figures put the total almost 50% higher. In China there is an apparent understatement of $61 million. One source of the variations is in definitions (as in the case of Indonesia) and in the basis of collection (investments approved rather than completed, for instance). There are no widely followed international standards of data for direct investment, making intercountry comparisons difficult. 9 In Canada, in which capital movements are unrestricted, monitoring investment outflows is particularly difficult. Statistics Canada, recognized as one of the best national statistics agencies in the world, gathers data annually from a survey of approximately 2,000 companies. 10 The 100 largest of these account for about 80% of the total value of outward FDI, according to StatsCan. 11 While the survey method will likely capture the major foreign investments by Canadian companies in Asia, it will not necessarily record the full range of investments. It appears that investments made in third countries by the overseas subsidiaries or associates of Canadian companies (those in which the direct equity stake is between 10% and 49.9%) are not being captured. This would help explain the relatively high investment in Singapore, some of which likely represents indirect Canadian holdings in Indonesia. Just as important are deals by smaller companies. A study by the Asia Pacific Foundation (APFC) revealed that 19 of the 84 publicly announced Canadian investments in Asia by way of M&A during the past thirteen years involved deals of US $1.5 million or less. 12 None of these deals was by a major company, and some were by first-time overseas investors, making it likely they fell through the mesh of StatsCan’s survey net. A fuller coverage of smaller Canadian investments might alter the picture on DIA. As accurate information on foreign investment is an important policy input, and can have
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ IMPORTS FROM ASIA PER CAPITA 1998 (C $) 0 500 1,000 1,500 2,000 2,500 Canada BC Ontario Quebec Newfoundland Manitoba Nova Scotia Alberta New Brunswick Saskatchewan PEI Yukon/NWT Sources: Adapted from Statistics Canada, Imports by Country, January to December 1998 (Cat. No. 65-006, Vol. 55, no. 4). 39 a valuable demonstration effect on Canadian businesses thinking of investing in Asia, APFC has begun collecting M&A data as a long-term project and as a service to government and business. Canadian companies, along with investors from most developed countries, have recently taken advantage of depressed asset values and relaxed regulations to substantially increase their investment in existing Asian-based enterprises. According to a listing prepared by the Asia Pacific Foundation, 25 Canadian companies have invested US $2.5 billion in Asian purchases since July 1997. This compares with US $1 billion invested by 37 companies in the eleven-and-a-half years before the crisis. (In each period, several companies were involved in multiple deals, so the total number of transactions exceeds the number of companies involved.) In addition, the average size of the deals has increased since 1994. There has been a notable shift in the focus of the takeovers as well. More than half the deals in the first period involved investments in mining activities — including a spate of small acquisitions in Indonesia when the Bre-X gold fever was at its height. Since the Asian crisis, fewer than a quarter of transactions have been in the mining sector. This is significant as the motivation for offshore investment by mining companies is to secure their raw materials. The desire to gain economies of scale by expanding operations may also exist, but it is generally secondary to the acquisition of an ore body. There may be some benefit to Canadian exports if mining equipment and supplies are involved in the project. However, mining investments do not hold out the same promise of long-term trade linkages back to Canada as do manufacturing investments. 13 Renewed interest in Asian investment as the region recovers from the financial crisis is also suggested by a survey of investment intentions carried out by APFC late last year. 14 The survey of companies that already have a physical presence in Asia Pacific, found that 56% planned to increase their investments in the region over the next 12 months, while 74% said they expected to boost their holdings within two to five years. Only four out of the 68 respondents had decided to reduce their exposure in Asia. Just under 60% of the respondents were manufacturers or service suppliers targeting Asia- Pacific customers. Most of the companies planning increased investments were looking to add new facilities or add to existing plant. Only nine out of 56 expected to grow through takeovers of existing companies. This could be explained by the motivation
Page 1 and 2: asia pacific foundation of canada 1
Page 3 and 4: ○ ○ ○ ○ ○ ○ ○ ○ ○
Page 5 and 6: October 2000, we will hold the firs
Page 7 and 8: OVERVIEW 1 asia in convalescence 7
Page 9 and 10: ○ ○ ○ ○ ○ ○ ○ ○ ○
Page 11 and 12: GRADE ‘98 Inward Investment C- In
Page 13 and 14: THE CHALLENGE OF GLOBALIZATION Unde
Page 15 and 16: The largest pool of investable Cana
Page 17 and 18: enabled Canada to take a stronger r
Page 19 and 20: emoval. However, most of the change
Page 21 and 22: MAJOR EVENTS 2 a year in review 21
Page 23 and 24: stock markets were climbing. As the
Page 25 and 26: six-fold in Thailand. With the exce
Page 27 and 28: the past played a very small role i
Page 29 and 30: it had allowed in recent years. A m
Page 31 and 32: SECURITY BACKTRACK While economic c
Page 33 and 34: Outbreaks of violence in other part
Page 35 and 36: ECONOMIC RELATIONS 3 looking for a
Page 37: TODAY’S DELAY IS TOMORROW’S LOS
Page 41 and 42: to achieve operating efficiencies t
Page 43 and 44: Finally, foreign investment by Cana
Page 45 and 46: NORTH AMERICAN INTEGRATION 4 too mu
Page 47 and 48: similar to that with the US with on
Page 49 and 50: British Columbia provides a recent
Page 51 and 52: part of US-assembled goods bound fo
Page 53 and 54: ASIAN EXPERTISE 5 hidden advantage
Page 55 and 56: cautioned that “not every Asian C
Page 57 and 58: usiness skills to enhance Canada-As
Page 59 and 60: 6 DEVELOPMENT ASSISTANCE ODA for a
Page 61 and 62: the term “development assistance
Page 63 and 64: The report emphasizes the need to
Page 65 and 66: ASIA PACIFIC FOUNDATION OF CANADA 7
Page 67 and 68: CANADIAN EDUCATION CENTRE NETWORK T
Page 69 and 70: NOTES CHAPTER 1 1. Based on markets
Page 71 and 72: NOTES 5. Research by Tamim Bayoumi
Page 73 and 74: REFERENCES —. Statistics Canada.
Page 75 and 76: REFERENCES United Nations Conferenc
Page 77 and 78: STATISTICAL APPENDIX ASIAN MOTHER T
Page 79: STATISTICAL APPENDIX CANADA’S TRA

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