Saudi Arabia and UAE among Japan's most favored investment targets

Monday, December 20, 2010

Tokyo- The Japan Bank for International Cooperation's annual survey once again had China at the top of the list of foreign countries that Japanese companies consider to be the most promising investment destinations, while Saudi Arabia and United Arab Emirates came in joint 20th.

China has been at the top of the list in the 19 years since the survey started.

Saudia Arabia dropped from 14th place to 20th, while the UAE stayed at the same rank. They were the only Arab countries to make the top 20.

The survey, which covers investment over the next three years, was conducted between July and November and involved 961 Japanese manufacturers with local units in China; 605 of the firms approached responded. The number of Japanese companies having a favorable view of China rose 3 percent from the previous year.

But the survey also showed that 47 percent of the responding companies have concerns about risks related to investment in China, such as fallout from diplomatic tensions and labor disputes.

India ranked second on the list, while Vietnam was third. The top three countries remained the same for the fifth straight year. Thailand, Brazil and Indonesia ranked 4th, 5th and 6th, respectively.

Of the companies that chose China as the most promising investment destination, 63 percent cited rising labor costs as a matter of concern. The figure is three times higher than for other countries. Labor strife – including strikes targeting Japanese companies – was cited as a matter of concern by 36 percent of those listing China as the most promising investment destination.

Twenty-two percent said the diplomatic row between Japan and China over disputed islands in the East China Sea had a negative influence on the way they responded, citing curbs on rare earth exports to Japan and stalled customs procedures in China.

Russia was No. 7 on the list, followed by the United States and South Korea.

Survey result: 1. China (399 votes), 2. India (312), Vietnam (166), 4. Thailand 135, 5. Brazil (127), 6. Indonesia (107), 7. Russia (75), 8. United States, (58), 9. South Korea (30), 10t. Malaysia (29), Taiwan (29), 12. Mexico (25), 13. Singapore (21), 14. the Philippines (14), 15t. Australia (8), Bangladesh (8), Turkey (8), 18. Germany (7), 19. United Kingdom (6), 20t. Myanmar (5), Poland (5), Saudi Arabia (5), United Arab Emirates (5).

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