This investor's guide to east Asia offers a one-stop shop for anyone considering operating in China, Hong Kong, Japan, Macau, Mongolia, South Korea or Taiwan. By Naomi Davies, Investment Monitor
East Asia – consisting of China, Hong Kong, Japan, Macau, Mongolia, South Korea and Taiwan – has experienced robust economic growth since the 1960s. Investment Monitor’s regional investor guide examines which countries are leading in terms of economic development, foreign investment, business friendliness, quality of life and environmental performance.
Foreign direct investment (FDI) across east Asia was dramatically impacted by Covid-19. Overall, FDI project numbers declined by 40.8% between 2019 and 2020. Regional FDI grew by 22.2% in 2021 but remained 27.7% below pre-pandemic levels.
China is the largest FDI recipient in east Asia. It received 481 FDI projects in 2021, representing 45.5% of regional FDI that year. This is a 20% increase compared with 2020 but still 44% below pre-Covid-19 investment levels.
Key FDI sectors include tourism, electronics, business and professional services, and software and IT services. Recent major projects include Saudi chemical manufacturing company SABIC’s planned $6.2bn petrochemical complex in Zhangzhou in partnership with Fujian Petrochemical Industrial Group, and South Korea-based electronics giant LG’s upcoming $2.1bn expansion of its Chinese automotive battery factory.
However, experts have warned that China’s historically high levels of FDI are starting to wane due to the growing prominence of domestic companies, increasing competition and rising tensions with the US.