Survey Says, Foreign Direct Investment (FDI) In China Is Best

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Posted by Dan on April 24, 2006 at 08:57 PM

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A reader from Vermont just sent me the A.T. Kearney FDI Confidence Index in support of my recent post, entitled, "Good China. Good. It's Simple. China Is All Good. Good. Good. Good. And Business Demands We All Realize This." Had I seen this "Confidence Index" before doing my post I would have considered adding another "good" to the title.

This survey (I am not sure why A.T. Kearney calls it an index) reveals that the CEOs, CFOs and "key decision makers" of the world's 1,000 largest firms have greater confidence in foreign direct investment (FDI) in China than any other country. FDI in China ranked first in all four of the different sectors delineated in the survey: manufacturing, telecommunications and utilities, financial and non-financial services, and wholesale and retail.

Bottom Line: China FDI is good business.

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Comments

Thx for sharing the FDI Confidence Index. I am particularly interested in Figure 3 which shows China's projects are more capital intensive than India's. It seems MNCs share the same outsource rationale, service industry will go to India and manufacturing will go to China.

I think investment in manufacturing will diminish gradually as infrastructure projects are completed but the service and IT industries will grow as innovation and automation advance.

I wouldn�t be surprised if in 10 years time FDI in India outpaces FDI in China, if China does not invest heavily in education.

Posted by: Antony Ma | April 25, 2006 7:46 PM

Mr. Ma --
Thanks for checking in. You raise a very good point about how we can expect service and IT business to grow faster over the next ten years than manufacturing and how India likely will benefit more from this than China.

I hesitate to agree, however, for two reasons. One, I am skeptical either India or China have good enough educational systems to keep up with future demands in the brainiest industries. Two, China's infrastructure outside its big cities still has so far to go that I just don't see building declining in China in the near future, short of a depression.

Dan

Posted by: China Law Blog | April 25, 2006 8:03 PM

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