Report Names the World’s Largest Investment Destination
According to a recent report released by the United Nations Economic and Social Commission of Asia and the Pacific (ESCAP), the Asia-Pacific region is now the world’s largest destination as well as its most significant source of foreign direct investment (FDI). The report is compiled annually with the goal of helping to equip policymakers with the required information to make timeous decisions on investment and trade policies.
ESCAP reported that the Asia-Pacific region as a whole attracted as much as 45% of international inflows during 2018 and was responsible for international outflows of around 52%. When considering only developing countries in the region, the numbers were also significant. These countries attracted around 40% of international FDI inflows and were responsible for 37% of the outflows. In spite of increasing trade tensions, inflows to China increased exponentially and was once again named as the largest recipient of inflows to the region. Member countries of ASEAN attracted the largest share of intraregional flows during 2018 while the most prominent sources of intraregional FDI were noted from countries located in the East and North-East Asia sub-region.
Will the Trend Continue?
In spite of continuously flowing FDI from 2018 through to 2019, Asia Pacific is still experiencing slow growth in inward greenfield investments. This, along with uncertainty when it comes to international trade, may hamper the region’s ability to attract a similar level of investment in 2020. In conclusion, investment prospects in Asia-Pacific are tied to unfolding risks of continuing economic and political disruptions around the world. However, the outlook is cautiously optimistic since the study revealed that there is a likelihood that the region will maintain steady FDI inflows and outflows into 2020, as it has throughout 2019.