According to World Investment Report 2024, there is a big rise in greenfield foreign investment in developing countries in Asia.
In 2023, there was a 44% surge in the total value of greenfield investment announcements and a 22% uptick in the quantity of such announcements for these economies, indicating the establishment or expansion of companies’ operations abroad.
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Despite a slowdown in 2023, developing Asia continued to attract significant foreign investment (FDI) reaching a level of $621 billion.
The region, particularly East and Southeast Asia, remained the top destination for FDI, taking up almost half of the worldwide stream.
Note: The value for each year represents the share of total inflows. Data excludes financial centres in the Caribbean and special-purpose entities in reporting countries.
International takeovers and acquisitions (M&A) that typically make up 10% to 15% of overseas investments in developing Asian countries saw a significant drop of nearly $30 billion, from $57 billion to $84 billion in 2023. This reduction was responsible for roughly half of the overall decrease in FDI flowing into the area.
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By GlobalDataChina, together with its Hong Kong Special Administrative Region (SAR), remain the top investors in the area by the total amount of foreign direct investment they hold, with the United States, Japan, and Singapore following closely behind.
Subregional trends:
In the East Asia region, FDI decreased by 9% mainly due to declines in China and Hong Kong SAR. While the predicted value of greenfield announcements increased by 65% the total growth was balanced out by a 58% decrease in the value of project funding deals.
FDI inflows into Southeast Asia stayed consistent, experiencing a rise in mergers and acquisitions (M&A) transactions. Greenfield investment announcements saw a significant increase of 42%, contributing an additional $62 billion in value. Nevertheless, this growth was offset by a $64 billion decline in the worth of international project finance agreements.
FDI inflows to South Asia have decreased primarily due to a 43% drop in India, whereas investments in other countries in the region have stayed consistent.
In West Asia, FDI experienced a 9% decline attributed to decreased M&A transactions. Nonetheless, the region saw an increase in both the quantity and value of greenfield investments and project finance deals, notably in Saudi Arabia, Turkey, and the United Arab Emirates.
FDI in Central Asia decreased by 27%. Nevertheless, the consistent performance in greenfield investment announcements and international project finance deals provides hope for better prospects in 2024.
Investing in sustainable development has seen a slight increase in developing Asia.
The number of greenfield projects announced in sectors related to the Sustainable Development Goals has gone up by 30% to a total of 1,225 projects, with a significant 54% increase in value. This growth is particularly notable in renewable energy, transport, and telecommunication.
On the other hand, the number of international project finance deals has decreased by 17%, partially balancing out the gains in greenfield FDI for sustainable development.
To access country fact sheets, please click here: https://unctad.org/wir
