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KUALA LUMPUR, July 4 (Bernama) -- Global foreign direct investment (FDI) inflows, which began to pick up in 2004, are expected to continue to increase in tandem with the anticipated economic growth, particularly in Asia and Latin America.
The Ministry of International Trade and Industry (MITI) said in its 2004 report that on the trade front, 2005 will see the unfolding of the impact of the full integration of the Agreement on Textiles and Clothing (ATC) which effectively rings in freer trade for these products.
However, the small exporting developing countries, which favour reform in textile trade, will now have to cope with intense competition, especially from China, the report said.
It added that as competition intensifies, developed markets, particularly the European Union (EU) and the United States, may increasingly resort to measures to protect their domestic manufacturers.
Although the International Monetary Fund (IMF) expects China to grow less vigorously than the 9.5 percent recorded in 2004, indicators show that there are no signs of slowing down, MITI said.
In the first quarter of 2005, China grew faster than expected, expanding at the same rate of 9.5 percent, it pointed out.
Given that China is one of the main drivers of the global economy, its continued expansion is a positive indicator for global growth, it added.
MITI said Asean is also expected to register steady growth of between five and 5.9 percent this year, as part of the positive outcome of efforts towards greater integration of the economies within the region, as well as a result of the continued growth in China and the US.
It added that India is expected to maintain sustainable growth in 2005, supported by the agriculture and services sectors, while the industrial sector is expected to grow at a lower rate.
The global growth, which began to slow down by the fourth quarter of 2004, is expected to hold in 2005, barring the continued rise in the price of oil and downturn in Japan and the Euro-zone, MITI said.
IMF estimates that overall world gross domestic product (GDP) will grow by 4.3 percent. According to MITI, global growth is expected to be uneven, with the US, China and India providing the impetus for expansion and Japan and Europe lagging behind.
The relatively poor performance of these two economies can be expected to continue, as long as domestic demand remains weak and oil prices high, it said.
Last year, the world economy recorded an overall growth of 5.1 percent, the fastest expansion recorded in more than a decade.
Asia, excluding Japan, continued to be the fastest growing region in the world, growing at 7.8 percent in 2004, MITI said.
In 2004, Asia accounted for 26.9 percent of global merchandise exports (2003: 26.9 percent) and 24 percent of imports (2003: 22.9 percent). This growth was attributed to the overall expansion in trade in almost all countries in the region.
China overtook Japan as the world's third largest source of exports and market for imports.
Exports from China grew by 35 percent to US$593.4 billion, while Japan exports expanded by 20 percent to US$565.5 billion.
Imports by China expanded by 36 percent in 2004 to US$561.4 billion from US$412.8 billion in 2003.
According to the United Nations Conference on Trade and Development (UNCTAD), world FDI inflows were expected to rise by six percent in 2004 to US$612 billion.
This recovery was still less than the peak recorded in 2000.
Nevertheless, the moderate increase, after a three-year decline, indicated an improvement in business confidence and an overall recovery in the world economy, MITI said.
Developing countries are estimated to have received inflows amounting to US$255 billion, an increase of 48 percent over the 2003 total of US$173 billion, it added.
The bulk of the inflow into developing countries were directed towards Asia.
FDI inflows into Asia and the Pacific totalled US$166 billion, or 55 percent of the total.
China, Hong Kong and Singapore together accounted for almost 70 percent of the inflows into Asia and the Pacific, with China receiving US$62 billion or 10.1 percent of the total global FDI.
Total FDI inflows into Malaysia in 2004 amounted to US$6.9 billion, MITI said.
In 2003, the global inflows of FDI continued to decline, for the third consecutive year, by 14.6 percent to US$580 billion, while outflows increased by 2.6 percent to US$612.2 billion.
Factors affecting the continue decline included uncertainties in economic growth prospects, falling stock market valuations, cost cutting and corporate downsizing, and reductions in mergers and acquisitions as well as privatisation.
Asia and the Pacific, and Africa registered higher inflows in 2003, compared with 2002, with Asia remaining the largest recipient of FDI inflows in the developing world, MITI said.
Inflows to Asia and the Pacific grew by 13.2 percent to US$107 billion in 2003, from US$94.5 billion in 2002, it added.
FDI inflows mainly were concentrated in China, Hong Kong, Singapore, India, South Korea, Azerbaijan and Malaysia.
The growth inflows was attributed to the region's increasing number of mergers and acquisitions, cost competitiveness, continued growth prospects, availability of raw materials and energy resources, information and communications technology (ICT) specialisation, adequate infrastructure, skilled and knowledgeable labour force, and conducive operating environment.
-- BERNAMA
KUALA LUMPUR, July 4 (Bernama) -- Global foreign direct investment (FDI) inflows, which began to pick up in 2004, are expected to continue to increase in tandem with the anticipated economic growth, particularly in Asia and Latin America.
The Ministry of International Trade and Industry (MITI) said in its 2004 report that on the trade front, 2005 will see the unfolding of the impact of the full integration of the Agreement on Textiles and Clothing (ATC) which effectively rings in freer trade for these products.
However, the small exporting developing countries, which favour reform in textile trade, will now have to cope with intense competition, especially from China, the report said.
It added that as competition intensifies, developed markets, particularly the European Union (EU) and the United States, may increasingly resort to measures to protect their domestic manufacturers.
Although the International Monetary Fund (IMF) expects China to grow less vigorously than the 9.5 percent recorded in 2004, indicators show that there are no signs of slowing down, MITI said.
In the first quarter of 2005, China grew faster than expected, expanding at the same rate of 9.5 percent, it pointed out.
Given that China is one of the main drivers of the global economy, its continued expansion is a positive indicator for global growth, it added.
MITI said Asean is also expected to register steady growth of between five and 5.9 percent this year, as part of the positive outcome of efforts towards greater integration of the economies within the region, as well as a result of the continued growth in China and the US.
It added that India is expected to maintain sustainable growth in 2005, supported by the agriculture and services sectors, while the industrial sector is expected to grow at a lower rate.
The global growth, which began to slow down by the fourth quarter of 2004, is expected to hold in 2005, barring the continued rise in the price of oil and downturn in Japan and the Euro-zone, MITI said.
IMF estimates that overall world gross domestic product (GDP) will grow by 4.3 percent. According to MITI, global growth is expected to be uneven, with the US, China and India providing the impetus for expansion and Japan and Europe lagging behind.
The relatively poor performance of these two economies can be expected to continue, as long as domestic demand remains weak and oil prices high, it said.
Last year, the world economy recorded an overall growth of 5.1 percent, the fastest expansion recorded in more than a decade.
Asia, excluding Japan, continued to be the fastest growing region in the world, growing at 7.8 percent in 2004, MITI said.
In 2004, Asia accounted for 26.9 percent of global merchandise exports (2003: 26.9 percent) and 24 percent of imports (2003: 22.9 percent). This growth was attributed to the overall expansion in trade in almost all countries in the region.
China overtook Japan as the world's third largest source of exports and market for imports.
Exports from China grew by 35 percent to US$593.4 billion, while Japan exports expanded by 20 percent to US$565.5 billion.
Imports by China expanded by 36 percent in 2004 to US$561.4 billion from US$412.8 billion in 2003.
According to the United Nations Conference on Trade and Development (UNCTAD), world FDI inflows were expected to rise by six percent in 2004 to US$612 billion.
This recovery was still less than the peak recorded in 2000.
Nevertheless, the moderate increase, after a three-year decline, indicated an improvement in business confidence and an overall recovery in the world economy, MITI said.
Developing countries are estimated to have received inflows amounting to US$255 billion, an increase of 48 percent over the 2003 total of US$173 billion, it added.
The bulk of the inflow into developing countries were directed towards Asia.
FDI inflows into Asia and the Pacific totalled US$166 billion, or 55 percent of the total.
China, Hong Kong and Singapore together accounted for almost 70 percent of the inflows into Asia and the Pacific, with China receiving US$62 billion or 10.1 percent of the total global FDI.
Total FDI inflows into Malaysia in 2004 amounted to US$6.9 billion, MITI said.
In 2003, the global inflows of FDI continued to decline, for the third consecutive year, by 14.6 percent to US$580 billion, while outflows increased by 2.6 percent to US$612.2 billion.
Factors affecting the continue decline included uncertainties in economic growth prospects, falling stock market valuations, cost cutting and corporate downsizing, and reductions in mergers and acquisitions as well as privatisation.
Asia and the Pacific, and Africa registered higher inflows in 2003, compared with 2002, with Asia remaining the largest recipient of FDI inflows in the developing world, MITI said.
Inflows to Asia and the Pacific grew by 13.2 percent to US$107 billion in 2003, from US$94.5 billion in 2002, it added.
FDI inflows mainly were concentrated in China, Hong Kong, Singapore, India, South Korea, Azerbaijan and Malaysia.
The growth inflows was attributed to the region's increasing number of mergers and acquisitions, cost competitiveness, continued growth prospects, availability of raw materials and energy resources, information and communications technology (ICT) specialisation, adequate infrastructure, skilled and knowledgeable labour force, and conducive operating environment.
-- BERNAMA