Southeast Asia sees investment boom, thanks to trade war

Southeast Asia sees investment boom, thanks to trade war

Workers assemble strollers at the Good Baby factory that produces equipment for babies and children in Kunshan city near Suzhou, Jiangsu province, China, Oct 17, 2018. (EPA photo)

Southeast Asia is seeing a boom in foreign direct investment as the intensifying trade war between the US and China prompts companies to shift production to the region.

Vietnam saw manufacturing inflows jump 18% in the first nine months of 2018, driven by investments including a $1.2 billion polypropylene production project by South Korea’s Hyosung Corp, according to a Maybank Kim Eng Research Pte note on Monday.

In January through July, Thailand’s net FDI rose 53% from a year earlier to $7.6 billion, with manufacturing inflows surging almost five times, according to central bank data. In the Philippines, net FDI into manufacturing surged to $861 million in the same period from $144 million a year earlier.

“The US-China trade war may be attracting more firms to set up in Asean to circumvent the tariffs,” Maybank economists Chua Hak Bin and Lee Ju Ye said in the note. “Sectors such as consumer products, industrial, technology & telecom hardware, automotive and chemicals have indicated interest in Southeast Asia.”

Southeast Asia is finding there’s some upside to the trade war, as it becomes an alternative base for firms relocating production away from China to avoid levies. About one-third of more than 430 American companies in China have or are considering moving production sites abroad amid the tensions, according to an Aug 29 to Sept 5 survey.

“Escalated trade tensions only accelerate the ongoing trend,” said Trinh Nguyen, a senior economist at Natixis Asia Ltd in Hong Kong. “Southeast Asia serves both as a great growth market, a place to offshore thanks to lower costs of production and liberalisation of trade, as well as a source of mitigation from geopolitical risks.”

Still, the region certainly isn’t immune to the fallout from the dispute — a report released on Tuesday cited the trade war as a factor in Thailand’s unexpected exports slump in September.

***Please contact thomas@NovaAdvisors.com for expert Global Sourcing throughout Southeast Asia

Article Source:  Bangkok Post (Bloomberg News), 22 October 2018

 

About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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