Friday, August 18, 2017 - 6:19:15

Japan investment may shift from Thailand to VN, Indonesia

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Japanese companies, Thailand’s biggest foreign investors, may spend more to build factories in neighbours, including Indonesia and Vietnam, after the worst flooding in 70 years disrupted global production.

Takahiro Sekido, chief economist from Tokyo-based Credit Agricole CIB, was quoted by Bloomberg on Nov. 15 as saying executives recognize the concentration risk after the floods.

“The recent trend of accelerating investment into Thailand will cool despite the fact that Thailand was such an ideal destination,” he said.

Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo , said Indonesia and Vietnam have attracted more foreign direct investment than Thailand last year and look set to attract more Japanese investment.

According to Nishihama , Indonesia has a big population and strong domestic demands meanwhile Vietnam ’s population is on the rise.

Bloomberg also cited Yoichi Yajima from the Japan External Trade Organisation (Jetro) as saying that he doest not expect a big withdrawal of investment from Thailand as the country’s infrastructure and industrial clusters make it an easier place for many Japanese companies to operate.

Thailand accounted for about 3.2 percent of Japan ’s cumulative foreign investment in the past two years, the second largest after China ’s 12.6 percent among Asian nations./.
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