Research Briefing | Oct 12, 2021

Pandemic disrupts APAC FDI, but prospects remain positive

research briefing for Pandemic disrupts FDI, but prospects remain positive

We believe prospects for FDI inflows into APAC over the medium term remain strong, even though pandemic-driven supply disruptions and uncertainties over the pace of recovery may see some firms rethink their supply chains.

What you will learn from this report:

  • We expect China to remain the top destination for FDI given its rapidly growing domestic market. And as supply chains continue to adjust to higher labour costs in China and trade protectionism, we anticipate SEA, notably Vietnam, to be the key beneficiary.
  • The region is well established in global supply chains, and its labour dynamics and openness to trade and FDI remain very favourable.
  • We rank the advanced Asian economies as some of the least attractive destinations for FDI due to relatively unfavourable labour dynamics. Plus, most have launched tighter screening since the pandemic, dampening FDI. That said, we expect these economies to remain important sources of FDI in the region.”
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