Singapore most attractive for Chinese investors, India ranks 11th: EIU

All of these factors suggest lower operational risks for Chinese companies and investors, who often encounter restrictions in other countries, EIU noted in the index report.

In addition, the affluent city state serves as a headquarters for Chinese firms looking to tap into the rapidly growing market of Southeast Asia. Its acclaimed technological expertise also offers research and development opportunities.

Indonesia, Malaysia, Hong Kong and Thailand rank second, third, fourth and fifth respectively in the index. Bangladesh’s rank is 12^th.

However, policy uncertainties may emerge as Singapore places more emphasis on social inclusion, such as an increased focus on wealth taxation and wage increases for low-income workers, which could disproportionately affect certain industries, EIU said.

South-east and South Asia have climbed steadily in EIU ranking since 2013, reflecting the regions’ robust growth outlook, growing middle class, abundant strategic natural resources and relative openness towards Chinese investors.

As export hubs, many countries maintain strong supply chain ties with upstream Chinese suppliers, while benefiting from reduced tariffs in key export markets downstream.

The attractiveness of Indonesia, Malaysia and Thailand are because of their relatively established infrastructure and complementary supply chains. The appeal of India (rank 11th), which theoretically offers significant opportunities, is hampered by strained bilateral relations, EIU noted.

The rising ranking of many emerging markets can be attributed to their strong ties with China, natural resources, market size and their pivotal role in the global supply chain, it said.

Turkey (rank 72nd) has lost its allure for Chinese investors because of an unpredictable foreign and economic policy landscape.

The ranking of many advanced markets, including the US (28th), Japan (36th), Canada (55th) and the United Kingdom (60th) has plunged as well. Their deteriorating relations with China and the subsequent screening of inbound investment present significant hurdles for Chinese investors.

The rankings for Russia (15th) and Iran (43rd) have declined or stayed low as Chinese investors seek to avoid the potential for secondary sanctions. Despite this, Russia remains in the top 20 because of its resource endowment and market size, particularly with the withdrawal of Western companies leaving market gaps in sanctions-free sectors.

Central and Eastern European countries like Poland (61st) have become less receptive to Chinese investment, especially after Russia’s invasion of Ukraine reignited concerns over European security.

Many Central Asian countries rank lower than other emerging markets, given their less open markets and political volatility. Taiwan (75th) experienced the steepest drop in ranking, as cross-Strait ties have deteriorated to one of their lowest points in recent decades.

Fibre2Fashion News Desk (DS)