China does not drain foreign investment away from other Southeast Asian nations but rather helps them to attract it, an English-language Singapore newspaper, the Business Times, reported Monday.
Quoting a study by the US securities house Salomon Smith Barney, the paper wrote, "Asian policy-makers are so fixed (in fears of China) that they fail to see the real threat in the competition for foreign investments," which comes from Latin America and eastern Europe.
Foreign direct investment (FDI) flowing into Latin America quadrupled to nearly US$80 billion last year since 1985. In the same period, FDI only doubled in Asia to US$120 billion, the paper noted.
Investor confidence in Latin America, especially Brazil and Mexico, has surged in recent years, the report said.
"FDI to China and other major sub-regions of Asia tend to be complementary (to one another) rather than competitive," the paper quote the study as saying.
The report offered three reasons to support this view:
---Asian economies are at different stages of development and tend to specialize in the production of different types of goods, so FDI flowing to one region would not go to another anyway.
---Investors are motivated by a desire to be closer to the products' customers, and customers are dispersed across Asia. That requires investment across the region.
---The World Trade Organization is likely to further open up China and boost its economic growth,which will generate more trade for the rest of the region.
(Xinhua News Agency 06/19/2001)
