Indonesia Remains Open to Foreign Investors

Indonesia’s policy stance will remain open to foreign investors despite there being some form of protectionist measures to safeguard certain domestic sectors and small businesses, says the Singapore-based Indonesian Investment Promotion Centre (IIPC).

“There is enough room and sectors for investors to participate in our vast economy,” IIPC head Muhamad Harri Santoso said during a breakout session themed Indonesia: Investment Outlook and Performance at the CIMB Asean SME Forum 2012.

According to Santoso, sectors such as food production, pharmaceutical and agricultural sub-segments such as livestock and fisheries may appeal to investors seeking business opportunities.

McKinsey & Co currently ranks Indonesia as the 16th largest economy in the world, offering up to US$500bil (RM1.53 trillion) worth of market opportunities for businesses in sectors ranging from consumer services, agriculture, fisheries, resources and education.

 

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Investment Slows Hurt Overseas Confidence in China

Foreign direct investment in China fell in August as a deepening economic slowdown hurt overseas confidence in the world’s most populous nation.

Spending declined 1.4 per cent from a year earlier to $8.33 billion, the Ministry of Commerce said in Beijing on Wednesday, the ninth drop in 10 months. Investment in the first eight months of the year fell 3.4 per cent to $75 billion, the ministry said.

China’s economy may grow at the slowest pace in 22 years this year as Europe’s debt crisis and slowing US expansion crimp exports, and a property crackdown damps domestic demand. The European Union Chamber of Commerce in China this month called for the government to make the nation’s markets more open to overseas companies.

“Concerns about an economic slowdown and worsening profitability in certain sectors in China are all contributing to the fall in foreign investment,” Zhu Haibin, Hong Kong-based chief China economist for JPMorgan Chase & Co., said before the release. “China is still in middle of an economic slowdown.”

 

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Who Is Asia’s New Darling of Investors?

Dondi Tawatao

As Asia’s economic giants China and India experience a slowdown, analysts recommend looking at a smaller regional player, which has been delivering on its growth promises.

The Philippines, Southeast Asia’s services-driven economy, expanded by a faster-than-expected 5.9 percent year on year in the second quarter, which takes its first half 2012 GDP growth to  6.1 percent, prompting Barclays Regional Economist Prakriti Sofat to call the country Asia’s “rising star.”

She expects full year growth to exceed the bank’s target of 5.5 percent, and adds that a credit ratings upgrade is also on the cards in the second half of 2013.

“After Indonesia received investment grade ratings, the market’s focus turned to the Philippines as the next potential candidate in Asia,” Sofat wrote in a note.

Increasing foreign direct investment (FDI) in the country, structural improvements – such as the passage of an anti-money laundering bill – and rising political stability will all strengthen the Philippines case to move to an investment grade, says Sofat.

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Foreign Investment Fading, China Expects Trade to Slow

BEIJING (Reuters) — China’s trade outlook for 2012 is worsening, weighed down especially by growing problems in Europe, the Commerce Ministry said on Thursday as it disclosed the longest run of falling growth in inward investment in the economy since the 2008-9 financial crisis.

The ministry singled out problems in the European Union —  China’s biggest overseas market — as the core difficulty for exporters. It published data showing foreign direct investment from Europe fell 2.7 percent year on year, to $4 billion, in the first seven months of 2012.

“Right now, the sharp drop of exports to E.U. countries is the biggest important factor weighing on  China’s export growth,” a ministry spokesman, Shen Danyang, said at a news conference.

“With the European debt crisis spreading and the global economy recovering at a slower than expected pace, we expect  China’s trade situation in the second half will become more severe and we are facing more pressure to meet the annual target for trade growth,” Mr. Shen added.

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China Offers $20 Billion in Loans to Africa

WSJ

China pledged billions in new aid to Africa and said its companies doing business there would act responsibly, as the country seeks smooth relations with the resource-rich continent despite emerging trade and social tensions.

China will offer $20 billion in loans to African countries to develop infrastructure, agriculture, manufacturing and small and midsize enterprises, Chinese President Hu Jintao said Thursday during a gathering of African leaders in Beijing. That figure is double what China committed in 2009.

Chinese officials also stressed deepening economic ties with Africa, a major source of China’s oil, metals and other commodities. Mr. Hu said trade between China and Africa doubled in the past six years and totaled $166.3 billion in 2011, while its direct investment there has reached $15 billion.

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Investor: Why Is the Foreign Direct Investment Falling?

 

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Reutors have reported that the foreign direct investment is hit by weak property sectors.

China’s foreign direct investment inflows fell 3 percent in the first half of 2012 versus last year, the Commerce Ministry said on Tuesday, the latest sign of intensifying headwinds facing the world’s second-largest economy as global growth slows.

The Commerce Ministry said on Tuesday that the country drew $59.1 billion in foreign direct investment (FDI) between January and June, with June’s inflow alone down 6.9 percent on year ago levels at $12.0 billion.

That confirmed figures given by a vice commerce minister on Monday.

“A drop of 3 percent in FDI in the first six months is mainly due to falling investment in the property sector which is the result of macro policies and we cannot say it is a bad thing,” Shen Danyang, the Commerce Ministry’s spokesman, told a news conference.

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