Increasing attractiveness of India, China and Singapore for investors helped South, East and Southeast Asia maintain their upward trend for FDI inflows in 2006, with India surpassing South Korea to become the fourth largest recipient of FDI in the region, the United Nations has reported.
Overall, FDI grew in 2006 for the third consecutive year to reach 1.2 trillion dollars, the UN Conference on Trade and Development (UNCTAD) said but warned that economic growth is likely to slow down this year because of high commodity prices and other factors.
It said FDI inflows to South, East, Southeast Asia and Oceania reached a new high of 187 billion dollars in 2006, showing an increase of 13 per cent over 2005.
India, it said, surpassed South Korea to become the fourth largest recipient in the region while China, Hong Kong and Singapore were the three largest recipients of FDI.
"Investments in high-tech industries by transnational corporations are growing rapidly in China. Meanwhile other countries, including India, are attracting increasing FDI for traditional manufacturing," statistics released by UN Conference on Trade and Development (UNCTAD) show.
UNCTAD said that outward investment from this region also increased last year, noting that China had consolidated its position as an important source of FDI, while India is also rapidly catching up.
China and India are challenging the dominance of Asia's newly industrializing economies as the main sources of FDI in the developing world, it added.