36 Exports to the EU are actually less than might be expected based the EU's imports from the rest of the world (i.e., trade intensity index is less than 1.0).

37 UNCTAD (2002c: 55) 3S Not including the category of "Others" which comprises fairly large investments from unspecified countries and unclassified sources, the latter of which is the banking sector. Although not specified, it may be related to investment in the banking sector of Thailand in the post-crisis period.

> 39 ASEM is an informal process of dialogue and cooperation bringing together the 15 EU member states and the European Commission with ten Asian countries (Brunei Darussalam, China, Indonesia, Japan South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam). IPAP's aim is to contribute to an enhancement of two-way investment flows between Asia and Europe by sharing experience and best practices on investment promotion and policy issues.

There were also disinvestments in Indonesia in previous years beginning in 1997 (during the crisis) when the U.S. was the only major investor to withdraw. Other source countries withdrew investment beginning in 1998, except the EU which began in 1999. The U.S. invested again in 1999, but disinvested in 2000. 41 See Urata (2001: 430-31) on this point.

42 The inclusion of the Virgin Islands and Bermuda among the top three originating countries for China and Hong Kong is related to their practice of "round tripping" and "tax haven routing" whereby capital inflows and outflows in the form of FDI move via tax haven economies into and out of Hong Kong. These economies account for large levels of inflows and outflows of Hong Kong-related FDI. Although more than half of Hong Kong's outward FDI goes to offshore financial centers (e.g., the Virgin Islands and the Cayman Islands), these funds actually are destined to eventually go elsewhere, including to mainland China.

43 Brunei Darussalam, Indonesia, Malaysia, the Philippines, and Thailand.

44 UNCTAD (2002c: 37) 45 Indonesia, Malaysia, the Philippines, and Thailand.

- 46 UNCTAD (2002c: Box III.2., 44)

47 JBIC (2002). The survey was conducted in July 2001 and covered 792 manufacturing companies that have three or more foreign affiliates, including at least one manufacturing base as of October 2000. There were 501 valid responses for an effective response rate of 63.3 percent. 48 UNCTAD 2002c: Box 111.2., 44)

- 49 Lardy (2002: 135-136)

50 The possibility for increased Japanese investment in China is further supported by a survey conducted by Japan Extemal Trade Organization (JETRO) in October 2001 which revealed that 21 percent of respondents (based on 645 responses among the 720 Japanese TNCs surveyed) indicated plans to relocate production sites to China with 67.5 percent of these likely to be moved from Japan, 9 percent from Hong Kong, 7.8 percent from ASEAN-5, 6.6 percent from Taiwan, and 1.2 percent from South Korea. In the same survey, respondents indicated that most aspects of the investment climate in Malaysia and Thailand were better than in China with concerns about China's investment climate centered on its establishment rules, transparency of investment rules and its tax system. However, respondents felt that market growth, production costs and labor supply were better in China. (UNCTAD (2002c: Box 111.2., 45).

'ASEAN (2000: 6) 52 See B. Low (2002) and Eckholm and Kahn (2002).

53 In 1992, 38 percent of Malayisa's total FDI stock was concentrated in the electrical and electronic equipment sector. The percentage of fixed assets in this industry that were foreign owned rose from 68 percent in 1970 to over 90 percent in 1990 with Japan being the single largest investor in this sector. [UNCTAD (2000: 54)] Malaysia exported 200 billion ringgit (US$52.6 billion) in electronic goods in 2001, almost three-quarters of its total manufacturing exports. [B. Low (2002)]

- 5 B. Low (2002)

- 55 UNCTAD (2002c: 162 and Table VI.7., 166)

- **56** UNCTAD (2002c: 40).

- 57 USTR (2002a).

- **58** UNCTAD (1999a: 12).

59 UNCTAD (2002c: 82 and 266).

60 FDI intensity is measured by the ratio of the share of partner "b" in FDI stock of region "a" to the share of the region "b" in world FDI stock. [See UNCTAD (2001: 57) for equation.] 122