- July 19, 2019
- Posted by: admin
- Category: Daily News
- Foreign investment shows signs of recovering in Myanmar, one of Southeast Asia’s frontier markets, led by more than twofold gains in inflows from China and Singapore.
- Approved foreign investments rose 79% y/y in 1H19, reaching USD2.35bn, according to Myanmar’s Directorate of Investment and Company Administration.
- Mainland Chinese and Hong Kong money accounts for 84 of the 134 newly approved investments in 1H19, an increase of about 140% y/y.
- In value terms, Chinese and Hong Kong investment in Myanmar grew 150% to USD590mn.
- The rebound looks likely to last throughout 2019, a turnaround for the government of de facto leader Aung San Suu Kyi, which has struggled to attract investment from Western nations critical of Myanmar’s treatment of the Rohingya Muslim minority population.
- Investment from Singapore, where many Japanese and Western companies base their regional operations, nearly tripled to USD1.3bn in 1H19.
- Inflows from the European Union totalled USD31mn.
- Much of the Chinese capital apparently went into Myanmar’s garment industry, which handles final production using imported materials, mainly from China.
- The U.S.-China trade war appears to have accelerated a shift in production by apparel companies to the Southeast Asian country, a trend that had been driven by rising Chinese labor costs.
- Foreign investment in Myanmar’s manufacturing sector rose about 60% to USD700mn.
- This comes on the back of Suu Kyi’s efforts to attract investors. It has allowed full foreign ownership of retail and wholesale businesses and recently approved such deals in its fledgling insurance market. Toyota Motor plans to build its first vehicle assembly plant in the country, Nikkei reported in May 19.
- But at the current pace, investment inflows in 2019 are unlikely to surpass the five-year average of USD5.5bn logged under the previous government, the last during military rule. The Suu Kyi government’s target of USD6bn also appears to remain out of reach.
External Link : https://asia.nikkei.com/Economy/Myanmar-investment-inflows-double-from-China-as-deals-surge