Crisis dams up Japanese investment flow to Asia<\/p>\n
TOKYO (AFP): Japan's investment in China, India and the United
\nStates is forecast to grow, but Asia's currency turmoil makes
\nJapanese firms more wary of their cash flow to some countries in
\nthe region, analysts say.<\/p>\n
"Despite obvious negative factors existing in the country such
\nas regulation problems, Japanese firms cannot ignore China as a
\nkey destination of their investment," said Hiroki Sekine, an
\nanalyst at the Export Import Bank of Japan (JEXIM).<\/p>\n
Japanese investment in the United States is also seen rising
\nsteadily because of the strong U.S. economy, while a growing
\nnumber of Japanese firms are showing strong interest in launching
\nbusinesses in India, the analyst said.<\/p>\n
According to an annual survey released by the government-owned
\nbank on Thursday, China remained for the third year in a row the
\nmost promising destination for direct Japanese investment for the
\nmid-term.<\/p>\n
The United States, the largest recipient of Japanese cash,
\nclimbed up to second place from fourth last year, with India
\nrising from seventh to fifth.<\/p>\n
A total of 445 Japanese manufacturing companies with three or
\nmore overseas affiliates responded to the survey, which was
\ncarried out by the bank between July and September.<\/p>\n
The poll also showed China, India and the United States were
\nthe top three most promising investment destinations for the long
\nrun, taken as the next decade.<\/p>\n
"Particularly, more and more Japanese companies are interested
\nin India," the bank analyst said.<\/p>\n
According to the finance ministry, Japanese direct investment
\nin India for the year to last March nearly doubled from a year
\nearlier to 24.7 billion yen ($191 million). Japan's investment in
\nthe country for the six months to September already reached 20.3
\nbillion yen.<\/p>\n
ASEAN<\/p>\n
On the other hand, analysts said Japanese firms were more
\ncautious about their investment in some of the Association of
\nSoutheast Asian Nations (ASEAN) nations, particularly Thailand,
\nMalaysia and Vietnam, in the wake of the currency crisis that has
\nswept the region since July.<\/p>\n
"In the past, Japanese companies considered they wanted to
\ninvest in Asia en bloc, but they have dropped such a rough idea
\nfollowing the turmoil," said Harunori Yamada, a senior researcher
\nof Mitsubishi Research Institute Inc.<\/p>\n
"Japanese companies will be more serious about selecting the
\ndestination of their investment in the region," Yamada said.<\/p>\n
"Gaps over the amount of Japanese investment among Asian
\ncountries will be widening, and this will be more obvious during
\nthe turn of the century," the researcher warned.<\/p>\n
ASEAN groups Brunei, Myanmar, Indonesia, Laos, Malaysia, the
\nPhilippines, Singapore, Thailand and Vietnam.<\/p>\n
The JEXIM poll showed Thailand slipped to fourth place from
\nsecond last year as a promising destination for Japanese direct
\ninvestment over the next three years.<\/p>\n
The bank said the decline was due to the Thai government's
\ndecision to float the baht in July which triggered hefty
\ndevaluations of neighboring currencies and regional economic
\nturmoil.<\/p>\n
The survey showed Malaysia was downgraded from sixth to eighth
\nwith Vietnam falling from fifth to sixth. Indonesia was unchanged
\nin third place.<\/p>\n
"As for Malaysia, (the) Japanese are concerned about high
\nlabor costs," Sekine said. "As for Vietnam, Japanese firms
\nrealized that the country was too premature to accept investment
\nsmoothly."<\/p>\n
The poll also showed Japan's overall foreign direct investment
\nin fiscal 1997 was estimated to increase 1.4 percent from a year
\nearlier.<\/p>\n
"Although it may be hard to attain the sharp increase observed
\nin the previous years, the high level of foreign direct
\ninvestment flow is expected to continue at the current level,"
\nthe bank said.<\/p>\n
Despite Tokyo's cautious stance towards some Asian countries,
\nJapanese money flows to the entire region have gained steadily.<\/p>\n
Japanese direct investment in Asia -- ASEAN members, China,
\nHong Kong, Sri Lanka and Pakistan -- jumped 26.4 percent from a
\nyear earlier to 794.4 billion yen ($6.2 billion) for the six
\nmonths to September, the finance ministry said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/crisis-dams-up-japanese-investment-flow-to-asia-1447893297",
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