Singapore remains top Asean investment pick for big four economies

SINGAPORE remains the top Asean investment pick for the world's big four economies - China, India, Japan, and the US - according to the Institute of Chartered Accountants in England and Wales' (ICAEW) latest Economic Insight report.

More than 50 per cent of foreign investments from these economies are destined for Singapore. India has allocated the highest proportion, with 97 per cent of their total Asean investments sitting in Singapore.

Cebr, ICAEW's partner and economic forecaster, and which undertakes a quarterly review of South-east Asian economies, with a focus on Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, also found that China's investment pattern looks different from the other three powers.

The world's second-largest economy has allocated substantial amounts of money to Myanmar, Laos and Cambodia; 11 per cent, 7 per cent and 8 per cent respectively. In comparison, each of the other three giants has less than 0.1 per cent of their investment stocks in these emerging nations. This enables China to acquire natural resources and gives its western reaches access to potential trade and shipment routes, rather than relying entirely on the eastern seaboard, said the report.

The report also noted that the competition for influence in the region between China and other major economies will benefit Asean with the unlocking of Chinese-led capital in the form of the China-Asean Investment Cooperation Fund (CAF) and the Asian Infrastructure Investment Bank (AIIB). The Japan-dominated Asian Development Bank (ADB) also recently announced a US$110 billion plan to invest in Asian infrastructure projects.

Scott Corfe, ICAEW economic adviser and Cebr associate director, said: "Asean is showing how, rather than harming themselves through competition, structurally similar economies can complement each other and create cross-border networks. Each country can specialise to its full extent, with supply chains spreading across East Asia - so raw material extraction, processing, parts manufacture and assembly are all taking place in different locations. This means that the maximum gains from trade are being realised."