Reed Cavendish Wealth Management - Southeast Asia Benefits From Trade War

TAIPEI CITY, Taiwan, October 23, 2018 (Newswire.com) - Analysts at Reed Cavendish Wealth Management say Southeast Asia is experiencing a significant increase in foreign direct investment as the escalating US-Sino trade dispute causes foreign companies to relocate production to other areas.

During the first three quarters of this year, Vietnam manufacturing inflows increased by 18 percent fueled by investments from international companies.

Martin Godwin, Head of Corporate Equity at Reed Cavendish Wealth Management says the ongoing trade dispute between the US and China may be prompting more companies to look to ASEAN countries to set up operations as a way to avoid the higher export tariffs imposed on China by the United States.

Several industries that deal in technology, consumer items, chemicals, and industrial manufacturing have shown a strong interest in Southeast Asia.

As a result, Southeast Asian countries are discovering that there are some positives to the trade battle. Approximately a third of the more than 400 American companies operating in China have indicated that they are planning to move their manufacturing operations abroad in light of the worsening tensions.

In the Philippines, foreign direct investment into manufacturing increased to $861 million from January to July this year, a massive surge from last year’s $144 million during the same period.

Reed Cavendish Wealth Management analysts believe that further escalation of the current trade dispute will only serve to speed up the current trend. Southeast Asia is a very good expansion market and a great place for offshore business due to reduced manufacturing expenses and liberalization of trade. The location also offers a means of avoiding geopolitical threats.

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Source: Reed Cavendish Wealth Management