Recent Policy Concerns in Asia and Latin America

It is not hard to find various analysts, commentators and policymakers in Asia and in Latin America who have voiced concerns about the emergence of PRC and that PRC is adversely affecting direct investment flows into their economies. In November 2002, Singaporean Deputy Prime Minister Lee Hsien Loong (who has since become the Prime Minister of Singapore) commented that "Southeast Asian countries are under intense competitive pressure, as their former activities, especially labor-intensive manufacturing, migrate to PRC. One indicator of this massive shift is the fact that Southeast Asia used to attract twice as much foreign direct investment as Northeast Asia, but the ratio is reversed." (ChinaOnline November 14, 2002). According to KOTRA, the state-run trade and investment promotion agency of the Republic of Korea, the rate of foreign direct investment in most Asian countries is falling as global investors are being drawn to invest in PRC (Republic of Korea Times August 27, 2002). World Economic Forum director for Asia, Frank J. Richter, said if the Asian countries do not take prudent and pragmatic steps to be as competitive as PRC, the foreign direct investment flows into these economies would be adversely affected (New Straits Times-Management Times March 9, 2002). Furthermore, Taipei,China's Vice Premier Lin Hsin-I said that facing the rapid rise of the Mainland Chinese economy, Taipei,China would have to take effective measures to increase its competitiveness. Taipei,China has to implement the "go south" policy to encourage Taipei,China to switch their investments from the Mainland to Southeast Asian countries (Taiwanese Central News Agency November 21, 2002).

In Latin America, Cesar Gavina, head of the 34-country Organization of American States, was quoted to have said, "The fear of PRC is floating in the atmosphere here. It has become a challenge to the Americas not only because of cheap labor, but also on the skilled labor, technological and foreign investment front." Panama's Vice Minister of Foreign Affairs, Nivia Rossana Casrellen, said, "The FTAA is moving ahead because of a collective will to speed up development and a collective fear of PRC" (Miami Herald November 21, 2003). According to Businessweek's Mexico City Bureau Chief, Geri Smith, " PRC has siphoned precious investment and jobs from Mexico…" (Businessweek November 8, 2004).

Download this Discussion Paper [ PDF 213.2KB| 32 pages ].

Comment(s)

There are [0] comment(s) for this entry. Post a comment.