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118 Outward Foreign Direct Investment by Enterprises from Singapore 1998 and 2002. 94 The improvement in the quality of data reported since 1989 and later again in 1994 partly explained the significant increase in OFDI flows. 95 Geographical distribution. Singapore’s OFDI has always been concentrated in the Asian region, although the degree of geographical concentration has decreased over time. More than 64 per cent of Singapore’s OFDI was in Asia. Throughout the 1990s, Asia remained the most favoured host region, accounting for about 47-52 per cent of OFDI from Singapore. Within Asia, Malaysia had always been the single most important destination until 1997 when China emerged as the largest recipient of Singapore’s OFDI. Singapore’s OFDI to Malaysia declined from 60 per cent in 1981 to 17 per cent in 1996 and 8 per cent in 2003. The decline was associated with the Government’s 1993 regionalization drive, emerging investment opportunities in China and other countries in the South East Asian region, including the Government’s involvement in the development of large industrial estates and infrastructural projects in Indonesia and China (e.g. China-Singapore Suzhou Industrial Park). Singapore’s OFDI to China and Indonesia grew significantly in 1993-2003. A large amount of Singapore’s OFDI to China was also channelled through Hong Kong (China) (table 1). 96 Detailed data on locally controlled Singaporean TNCs in table 1 indicate that between 1996 and 2002 the proportion of locally controlled OFDI from Singapore to Asia decreased from about 62 per cent in 1996 to 52 per cent in 2002, indicating a gradual shift in the geographical focus of Singaporean firms from investing in Asia to developed regions such as Europe (58 per cent in 2002) and Australia (64 per cent in 2002). One key explanation for this geographical shift is the increasing number of mergers and acquisitions (M&As) conducted by large locally controlled TNCs affiliates (see below). The Caribbean and Latin American countries also emerged as an important host region for OFDI from Singapore. In 2003, the region hosted some 28 per cent of OFDI from Singapore. 94 The Department of Statistics does not publish annual flow data on OFDI from Singapore. Instead, only stock data are published. All flow data are calculated from these stock data by subtracting the previous year from the current year. 95 Since 1994 the OFDI data series has included loans granted to affiliates abroad. 96 It is difficult to estimate the exact percentage of Singapore’s OFDI into China that is channelled through Hong Kong (China). Through personal interviews with many subsidiaries of Singapore TNCs in Hong Kong (China), I found that some large banks and property developers from Singapore have invested in China out of their Hong Kong (China) operations. These large-scale investments may account for a significant portion of OFDI from Singapore to Hong Kong (China). The main reason for this pattern of channelling OFDI through Hong Kong (China) is to enable better control and management of these China-bound investments out of the Hong Kong (China) offices of Singaporean TNCs. While some of this OFDI was in the natural resources sector, a substantial portion went to tax-free zones in the region. Sectoral distribution. The financial sector spearheaded Singapore’s OFDI. Some 47 per cent of OFDI in 1990 came from this sector. The sector’s share of OFDI consistently increased in 1990-2003. By 2002, the financial sector accounted for a 62 per cent share of total OFDI, reflecting Singapore’s competitiveness as an international financial centre. 97 Despite Singapore’s competitive strengths in manufacturing, the sector accounted for only 20 per cent of OFDI in 1990, and declined further to 8.5 per cent in 2002 (table 2). This decline was a consequence of the decrease in the share of manufacturing activities in Singapore’s GDP in the same period. In terms of activity abroad, the share of the manufacturing sector remained fairly consistent, hovering between 18 and 25 per cent in the same period. However, investors from Singapore may not be classified as manufacturing firms, even though they are investing in manufacturing activities abroad. Financial, transport and manufacturing firms were the three largest industries investing abroad from Singapore. They accounted for 86 per cent of Singapore’s OFDI at year end 2002. Asia, in particular China and South East Asian countries, accounted for the overwhelming majority of manufacturing, commerce and real estate investments from Singapore in 1996 (figure 1). By 2002, however, only about 45 per cent of manufacturing OFDI went to Asia as compared with 93 per cent in 1996. Oceania received 20 per cent and Europe 16 per cent of Singapore OFDI stock in 2002. A large proportion of real estate OFDI went to Europe (about 60 per cent), contributed by major hotel and property investments made by leading Singaporean firms. In the financial sector, Europe (United Kingdom, Netherlands and Belgium) and other economies such as the Netherlands Antilles, Liberia and other tax haven locations emerged as the most important destinations for OFDI in 1996. The share of Asia in financial services OFDI rose to above 50 per cent in 2002, which reflected the recent waves of mergers and acquisitions made by Singaporean financial institutions in Indonesia, Hong Kong (China), the Philippines and Thailand. The 1993 regionalization drive had an impact on Singapore’s OFDI to China. Some 151 of the 204 sample TNCs have established 365 affiliates in China. On average, each TNC has more than two affiliates in China. At least half of these affiliates have established in China after 1992. Malaysia hosts the largest share of TNC affiliates: 119 of the 204 TNC established 273 affiliates there. On the other hand, these TNCs 97 In terms of activity abroad by Singaporean firms, the financial sector’s share of OFDI hovered consistently in the range of 54 per cent-56 per cent in 1990-2003.
Table 1. Singapore: OFDI stock, by geographical distribution, 1981-2003 (Millions of Singapore dollars; percentage of local-controlled companies in parentheses) Economy 1981 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 Asian countries 1289.9 1721.4 7013.3 27101.2 31714.2(62) 37316.6(60) 42905.2(65) 46026.4(64) 57542.8(59) 68453.3(51) 70746.2(52) 72994.1 ASEAN 1078.5 1133.3 3567.1 16088.2 16874.2(59) 17924.8(54) 18264.8(58) 18548.2(57) 23568.8(53) 28548.1(48) 30512.5(49) 32621.6 Brunei 3.7 52.9 66.2 92.0 89.9(74) 73.9(74) 63.9(81) 81.4(57) 98.1(61) 56.8(79) 51.6(79) 52.8 Indonesia 39.5 65.0 224.8 4030.9 3914.3(35) 6519.0(21) 4484.7(34) 4516.9(33) 5461.8(36) 7599.9(40) 8592.9(46) 9828.4 Malaysia 1006.9 971.8 2790.1 9715.9 9591.1(69) 8908.0(72) 8610.0(70) 7939.8(67) 9754.0(66) 11303.0(57) 12141.4(56) 12758.9 Philippines 18.4 22.4 97.7 625.1 1003.8(63) 934.1(56) 1297.6(72) 1480.7(77) 2555.6(51) 2741.7(55) 2693.6(56) 2779.6 Thailand 10.0 21.2 388.4 1252.8 1573.0(39) 1219.0(39) 1986.4(48) 2685.7(55) 3494.4(39) 4506.0(32) 4617.7(34) 4404.0 Viet Nam* - - - 371.3 702.1(86) 1001.9(84) 1050.9(53) 895.5(55) 1069.7(58) 1067.0(57) 1149.2(51) 1396.0 China - 57.6 239.7 2968.2 6414.1(73) 10477.0(64) 12186.3(79) 12625.3(78) 15710.2(69) 17499.2(50) 17702.4(50) 17623.9 Hong Kong (China) 181.8 460.7 2266.2 6268.3 5973.6(64) 8113.0(54) 7668.0(67) 8399.4(67) 8508.0(70) 11564.1(64) 12042.3(62) 11529.0 Japan 0.3 5.0 51.8 465.8 454.9(13) 535.1(8) 865.5(51) 828.2(73) 993.8(59) 1468.1(64) 1548.1(70) 2051.5 Taiwan Province of China 12.9 32.9 494.8 573.2 570.7(51) 657.7(55) 1287.6(48) 1715.0(62) 3571.4(39) 3586.3(37) 3319.1(39) 3392.1 Republic of Korea - - - - - - 669.0(3) 1691.1(9) 2403.3(24) 2754.0(29) 2505.3(30) 2202.1 Others 16.2 31.9 393.7 737.4 1426.6(62) 1981.2(63) 1648.9(73) 1812.8(81) 1902.5(80) 2266.6(67) 2234.9(63) 2509.5 European countries 50.7 89.3 1095.4 5550.8 8754.0(30) 11391.4(30) 9581.1(40) 12901.3(33) 8934.9(75) 12692.4(55) 14003.0(58) 12379.2 Netherlands 0.8 12.0 656.3 1020.8 2422.6(31) 2254.0(29) 2113.6(11) 2217.3(17) 1188.0(35) 1295.9(34) 1154.0(27) 480.5 United Kingdom 49.7 45.9 300.4 3296.5 5021.5(27) 7678.0(29) 3275.8(87) 3338.6(88) 4903.4(89) 6843.3(56) 6884.8(54) 7183.4 Germany - - - - - - - - - 156.3(79) 102.5(98) 102.3 Others 0.2 31.4 138.6 1233.4 1309.9(39) 1457.4(34) 642.0(94) 751.0(88) 1568.1(94) 1836.3(93) 2363.6(95) 2383.0 Australasia 62.6 176.9 1889.0 3566.7 3226.7(45) 3205.7(51) 2348.8(66) 2355.8(66) 3352.9(73) 3031.2(57) 3965.7(60) 5586.9 Australia 62.6 176.9 530.5 1448.3 1773.1(59) 1821.2(72) 1708.7(74) 1756.1(72) 2486.9(74) 2518.6(58) 3225.1(64) 4528.3 New Zealand - - 1358.5 2118.4 1453.6(28) 1384.5(23) 640.1(45) 599.7(47) 866.0(69) 512.6(50) 740.6(41) 1058.6 Canada - 17.6 - - - - - - - 55.7(78) 26.4(79) 106.0 United States 31.8 66.1 689.7 2635.2 2628.9(93) 2905.0(91) 6063.9(49) 4285.1(97) 6187.5(94) 7336.0(93) 8144.3(95) 9188.0 Caribbean/Latin America - - - - - - - - - 39982.3(72) 42154.5(76) 42569.0 Other countries n.e.c. 242.9 185.9 2934.3 7386.3 9212.7(43) 15764.2(36) 17719.4(37) 18650.0(41) 22273.0(39) 8132.7(22) 9396.3(32) 7054.8 CHAPTER X 119 Total 1677.7 2257.2 13621.7 46240.2 55536.4(54) 70640.5(51) 75622.4(56) 84218.6(56) 98291.1(58) 139683.7(58) 148436.3(61) 149878.0
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United Nations Conference on Trade
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Preface The landscape of internatio
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Acknowledgements This publication i
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viii Global Players from Emerging M
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x Global Players from Emerging Mark
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2 Global Players from Emerging Mark
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10 Global Players from Emerging Mar
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14 Outward Foreign Direct Investmen
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