Introduction

Much of the growth in Asian FDI has been driven by China’s liberalization and opening-up to the outside world, particularly as a result of policies aimed at investment-led growth. Table 1.2 shows outward FDI figures for some of the main Asian investors. Between the mid-1980s and 1990s the total volume of outward investment increased by orders of magnitude. Absolute values of investment to the major destinations increased but the share of the US as a recipient declined in favour of the Asian countries, including China, and Europe. Only Singapore’s pattern is different, arising from a very large decline in Malaysia’s share of Singaporean FDI (from over 50% to less than 25% between 1985 and 1993). It is fairly clear that massive shifts in FDI can occur over relatively short periods of time. The boom in FDI into Europe in the early 1990s may have

been induced by implementation of the Single Market and anticipatory fears of a Regional fortress. In the last two or three years there are indications of increasingly large switches into China despite Tiananmen.