According to recently released figures from the US Bureau of Economic Analysis (BEA), Southeast Asian foreign direct investment (FDI) in the United States is making a recovery from the effects of the Global Financial Crisis. While Southeast Asia’s FDI stock in the United States declined by 18 percent, or $4.9 billion, from $26.6 billion in 2008 to $21.7 billion in 2009, the figure rebounded by $1 billion to $22.7 billion in 2010.
Although the amount remains 15 percent below its 2008 peak, this 4.3-percent increase from 2009 put Southeast Asia back on the upward trend that it had sustained since earlier in the decade. Southeast Asia’s FDI stock in the United States has increased fourfold from its 2000 level at $5.6 billion, and the region is the third-largest FDI source in the Asia-Pacific behind Japan and Australia in 2010.
Southeast Asia’s impact to the US economy is larger than these figures might suggest. For instance, according to a BEA report, companies in Singapore, from which the region’s FDI stock in the United States overwhelmingly originates, controlled $34.8 billion of assets in 2009, employed almost 30,000 people, and sent out $524 million as US exports of goods. By contrast, firms based in China—a country more than twice the size of Southeast Asia in population—owned assets worth $19 billion, employed over 4,000 people, and contributed $120 million to US exports.
More remarkably, Southeast Asia has retained its position as the largest destination of US FDI in the Asia-Pacific, ahead of Australia, Japan, and China. Another new BEA dataset shows that of the $611 billion total US FDI going to the Asia-Pacific in 2010, over a quarter ended up in Southeast Asia. US FDI in Southeast Asia amounted to $157 billion in 2010, an increase of 17.5 percent or $23.4 billion over the previous year. The FDI figure for Southeast Asia has increased by almost a quarter since 2008 and is three times as large as in 2000.
Nearly all of Southeast Asian FDI in the United States originates from Singapore and Malaysia. In 2010, these two countries accounted for 97.8 percent of Southeast Asia’s FDI in the United States. Singapore’s figure was $21.8 billion, and Malaysia’s amounted to $362 million. The picture is similar for US direct investment in Southeast Asia. Over two-thirds of US direct investment in Southeast Asia, totaling $106 billion, went to Singapore in 2010. Together with Singapore,Indonesia ($15.5 billion), Malaysia ($16.0 billion), and Thailand ($12.7 billion) hosted over 95 percent of US direct investment in Southeast Asia in 2010.
Of the $157 billion the United States has invested in Southeast Asia, 46 percent went to holding companies ($72.0 billion), 23 percent to manufacturing ($36.9 billion), 9 percent to finance and depository institutions ($14.8 billion). (The BEA does not track the reverse distribution.)
Amid the current hype about China and India, countries in Southeast Asia often get scant attention. But this is unwarranted when it comes to investment ties with the Unites States. Despite the uneven distribution of investment flows with the region, Southeast Asia as a whole remains an attractive destination for US direct investment and a sizable source of FDI to the United States.