Japan to maintain ASEAN investments: JBIC

Japan to maintain ASEAN investments: JBIC

MANILA (AFP): Japanese firms are unlikely to scale down their
investments in Southeast Asia despite an economic slowdown at
home, the Japanese Bank for International Cooperation (JBIC) said
on Wednesday.

The bank's research chief, Shinji Kaburagi, said Malaysia,
Indonesia, the Philippines and Thailand -- what he called the
ASEAN-4 -- would remain investment-pulling centers despite
Japan's economic ills.

Southeast Asia was a "very important region for Japanese
companies because they are geographically and spiritually close,"
he said.

Kaburagi could not give latest Japanese investment figures for
the four nations, among 10 members of the Association of
Southeast Asian Nations (ASEAN).

"In terms of balance sheets, Japanese companies may be
affected very much but as long as they have already set up
production bases in the ASEAN-4, they would not change
drastically their foreign direct investment policy," he told a
news conference here.

The Japanese yen currency and shares as well as industrial
production have plunged as recovery in the world's second biggest
economy ground to a standstill. Japanese banks are also saddled
with billions of dollars of bad loans.

Kaburagi, director of JBIC's Research Institute for
Development and Finance, said new Japanese investments to the
ASEAN-4 would be largely in the information technology sector.

The institute is the research wing of JBIC, the core
organization responsible for conducting Japan's external economic
policy and economic cooperation.

Kaburagi said based on a JBIC survey last year to identify
investment trends, China emerged as the number one potential
target of Japanese foreign direct investments.

But Kaburagi said this must not be interpreted that ASEAN was
losing its luster as a Japanese investment lure, adding that
Japanese companies were merely diversifying their investments.

"I emphasis that Japanese companies are still sticking to
their business operations in ASEAN while trying to expand
business operations in China," he said. "They have to diversify
the risk," he said.

"There may be some Japanese production facilities based in
Thailand or Malaysia which may shift to China but not the
majority because Japanese companies have clear business
strategies for the region," Kaburagi said.

On the Philippines, he said Japanese companies were confident
of the new government under President Gloria Arroyo because it
was "more transparent and market oriented" than the previous
administration.

Arroyo's predecessor Joseph Estrada was accused of massive
corruption and ousted by a military-backed popular uprising.