Chapter 14: Government Policies Towards FDI Across East and Southeast Asia: Move Towards Business Policies Encouraging Inter-firm Relationships between MNEs and Local Firms
14. Government policies towards FDI across East and Southeast Asia: move towards business policies encouraging inter-ﬁrm relationships between MNEs and local ﬁrms Axèle Giroud Over the past two decades, levels of foreign investment ﬂows worldwide have risen exponentially to reach a peak of US$1388 billion in 2000. In 2003, Asia attracted US$96.9 billion out of the world total of US$559.5 billion foreign direct investment (FDI) inﬂows worldwide (UNCTAD, 2004). Speciﬁcally, countries across East and Southeast Asia have become major recipients of world FDI, with the notable emergence of China as the world’s biggest host for foreign investment. Total FDI inward stocks in China soared from US$63.6 billion in 1993 to US$501.5 billion in 2003. The experience of China has been unmatched elsewhere. Still, other countries in the region have also witnessed a sharp increase in inward FDI stocks. These increased from US$213.5 billion in Hong Kong in 1993 to US$375.0 billion in 2003; from US$41.6 billion to US$147.3 billion in Singapore; and from US$20.6 billion to US$59.0 billion in Malaysia (UNCTAD, 2004). In 2003, the major recipients of inward FDI stocks in the region were China, Hong Kong, Singapore, Malaysia, Indonesia, South Korea, Thailand, Taiwan and Vietnam. While levels of stocks do diﬀer widely, from US$501.5 billion in China to US$18.6 billion in Vietnam, all countries, bar Indonesia, have witnessed a steady increase in FDI stocks, encouraging governments to adapt and develop...
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