Pandemic disrupts APAC 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.”
Big shifts are underway in Russia-China trade
Data for Q3 on the volume of China's imports of crude from Russia show a drop against the June level. Rather than an indication that China's demand has peaked, this may be a sign that China is preparing for the Russian oil price cap recently agreed by G7 by shifting some of its purchases to the grey market.Find Out More
Indonesia likely to miss fiscal target in 2023
We expect Indonesia's budget balance to show a large deficit in H2 of this year as the cost of fuel subsidies is finally reflected in the fiscal accounts.Find Out More