We believe India and the ASEAN-5 including Indonesia, Malaysia, Philippines, Thailand and Vietnam — or what we collectively call Asia’s tiger cubs — will be the next big magnets for foreign direct investment (FDI).
This is consistent with a key theme we are seeing in Asia: a long-run economic divergence between these striving cubs and Asia’s ageing tigers — China, Korea, Taiwan, Hong Kong and Singapore.
Unlike in the past, when the United States and European Union accounted for bulk of FDI flows, we expect a growing regional bias in capital flows, as the source of FDI shifts from west to east, especially FDI from high-saving Japan and China. For Japan, the push to invest in emerging Asia reflects an even greater need than in the past for new growth opportunities to offset its ageing population and a contracting domestic market.
Japanese companies ha...