FOREIGN INVESTMENT IN SOUTH-EAST ASIA SOARS – CREDIT INSURER

Foreign investment to south-east Asia has tripled in the last five years, according to a new report commissioned by credit insurer Atradius. But certain investor concerns remain. The region is no longer seen solely as a manufacturing and sourcing hub. Instead investors flock to the region for opportunities for large businesses to grow According to an Economist Intelligence Unit survey conducted on behalf of Atradius, firms wanting to locate their operations outside China were primarily the reason why this region’s profits had soared in recent years “China is no longer dirt-cheap,” the report, Rich pickings – opportunities in south-east Asia’s emerging markets, stated. And with the rising cost of commodities and the restructured Chinese tax system, investors have started to look elsewhere in the region. Still, respondents to the survey still expressed some concern about moving further into the region. Almost half of them believed the history of political instability was a major obstacle in the region, especially in Singapore. Onerous regulations, insufficient protection of property rights and corruption were also highlighted as major stumbling blocks. It has also been predicted the region will feel the impact of the US slowdown into 2009 but a sharp upturn will follow shortly after.