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Trade war

Southeast Asia benefits from FDI surge in first half

Investments up 18%, with US-China trade war seen accelerating trend

Lower labor costs give foreign manufacturers a reason to relocate to Southeast Asia. This photo shows workers in a foreign-owned company in Vinh Yen city, outside Hanoi.   © Reuters

SINGAPORE -- Southeast Asian countries received more foreign direct investment in the first half of this year from a year ago, and this trend is set to continue as escalating U.S.-China trade tensions prompt manufacturers to relocate production from China.

According to last week's report by the United Nations Conference on Trade and Development, net FDI flow into Southeast Asia rose 18% to $73 billion in the first half of 2018 from a year ago, compared with a global total of minus 41% over the same period. The biggest beneficiaries in the region in terms of growth rate were Thailand, followed by the Philippines and Cambodia. Investment into South Asia -- mainly India -- also surged 13% to $25 billion.

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