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China has long been the world’s main foreign direct investment destination, but competition between the United States and China and the risk policies of Western countries have made Southeast Asia the new favorite for foreign investment.
China’s foreign investment in the third quarter of 2022 recorded a deficit of US$54.9 billion for the first time since 1998. After foreign investment left China, it flowed to Southeast Asia. Southeast Asia has political stability and great market potential, making it a buffer for competition between the United States and China.
According to Yahoo Finance, foreign direct investment attracted by Southeast Asia in 2022 will reach a record high of US$222.5 billion (RM1 trillion). During the period of tense relations between the United States and China, Southeast Asia attracted foreign investment by as much as 40%.
In order to reduce dependence on China’s supply chain, American companies are accelerating investment in Southeast Asia, and Chinese companies are also making capital adjustments in the region.
This reflects Southeast Asia’s benefit and strategic position in the decoupling between the United States and China.
(Source: Xingzhou.com Image source: freepik)
