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.