Asia Continues to be a Lucrative Destination for FDI, says HSBC's new Report

As reported by HSBC, foreign direct investment (FDI) continues to pour into Asia, with much of it focused on manufacturing, cementing the region's position as the centre of global trade. Inflows are especially large relative to the size of economies in Vietnam, Malaysia, Australia, and New Zealand, but far less so in South Korea, mainland China, and Japan, according to the report.

According to a recent HSBC report, the Association of Southeast Asian Nations (ASEAN) has surpassed mainland China for the second year in a row, particularly in terms of new, rather than repeat, investment.

Meanwhile, mainland Chinese manufacturers are increasingly investing in other economies, particularly ASEAN, according to the report.

The pandemic has had little impact on Asian FDI flows, and the continent remains a good place to invest, according to the bank.

FDI inflows exceed 2% of GDP in Vietnam, Malaysia, New Zealand, Australia, and the Philippines, compared to 1% in South Korea, Japan, mainland China, and Bangladesh.

In the first half of this year, total disbursed FDI volume in Vietnam reached $10.02 billion, a 0.5% increase year on year. According to the Ministry of Planning and Investment, FDI inflows into the country totaled $13.43 billion in the first half, a 4.3% decrease year on year.