After the stock markets of Asian developing nations underwent a sharp correction earlier this year, the flow of foreign money to these markets slackened. But the flow of foreign direct investment to the region continues to accelerate, observes economist Joseph Quinlan of Dean Witter Reynolds Inc.
Quinlan notes that foreign investment approvals in the first half of 1994 were up 49% in Taiwan, to $640 million. Approved manufacturing projects in Malaysia more than doubled, to $3.9 billion. Indonesia posted a 23% increase, to $5.3 billion. Thailand approved nearly $5 billion through April, more than in all of 1993. And China's foreign investment commitments in the first half rose 55%, to an eye-popping $14.7 billion.
Much of this capital is coming from investors in the U.S., Europe, and, particularly, Japan, whose manufacturers are now targeting China as their No.1 investment location in developing Asia. "The day when Japanese technology and capital merge with China's massive labor pool and abundant natural resources has arrived," says Quinlan.