Chinese investors look to Singapore after USA, a study by EIU finds

Singapore, according to a recent study, has become the second-most attractive destination for investors from China. In first place, the United States still holds its own, but Singapore is fast catching up.

As per the study Singapore notched up a score of 54.6 out of 100 as compared to the States’ 57.5. The study was conducted by The Economist Intelligence Unit (EIU), which placed Hong Kong in third with a score of 50.2. A total of 67 economies were evaluated based on their worth for investors from China.

The top three are unchanged from the survey last year, as they are developed economies favored by investors. The ratings take into account the market capitalization, the operational hassle, and the probability to expand etc to arrive at a consensus for investing locales. Singapore and Hong Kong feature so high in the list mainly because of their openness to foreign investment.

According to the EIU Singapore has managed to trump Hong Kong to second place as it provides a diversified platform, while Hong Kong is restricted to a few sectors alone. It is therefore understandable that Singapore has the capacity to attract more investors as compared Hong Kong. For Singapore, the Chinese investment total has gone up to a whopping US$2 billion from the paltry US$20 million in 2005.

Japan has meanwhile, slipped to a lowly rank of 6^th despite being the closest neighbour. According to the EIU, the reason for this is years of deflating economy and no impressive economic growth to show. Chinese investors have therefore chosen to look further than many would expect them to. The States lead the list as normal with US$3.9 billion worth of investment from their Chinese counterparts. One of the main reasons behind this, as the EIU puts it, is the vast natural resource inventory that the US provides and the level intellectual property they can serve up.

The study also predicted, that by 2017, China’s outbound investment activities will easily overtake the incoming investment drive and make China a net investor in the global market.