Shanghai has attracted the highest volumes of financial sector foreign direct investment (FDI) in the Asia-Pacific region in the 12 months to the end of January 2014. About $1.6bn flew into the Chinese hub across a total of 18 projects. This represents an average capital expenditure of just under $88m per project, the highest among top centres in the region.
The largest individual investments into Shanghai’s financial sector were the $160m development of local headquarters for Singapore’s Oversea Chinese Banking Corporation Bank, and the $120m spent to build a precious metal vault for US-based logistics and storage specialist Malca-Amit, which the company expects will be used by both Chinese and international banks.
Singapore and Hong Kong are ranked in second and third positions for financial sector FDI in the Asia-Pacific region with about $1.1bn and $900m, respectively, while China’s other mainland financial centre, Beijing, attracted more than $450m across six projects.
The top 10 places for inward FDI are mainly occupied by emerging market cities, with the exception of Sydney and Tokyo, which feature in fifth and seventh positions, respectively. The Australian financial centre attracted a total $313m from a wide-ranging group of investors. These include Canadian foreign exchange and payment services provider Cambridge Mercantile, to Intesa Sanpaolo establishing a corporate banking representative office in Sydney, to NMC Group, the United Arab Emirates-based conglomerate which includes retail financial services in its operations. FDI into Tokyo totalled $244m and was directed mainly into the investment fund and financial trading spaces.
Total inward FDI into Asia-Pacific’s top 10 centres was a healthy $5.48bn, but the regions’ top cities by FDI outflows generated even higher capital expenditure at $6.06bn.
Singapore leads the outflows table with $1.4bn and 23 projects. The largest single investment out of the city-state was the Government of Singapore Investment Corporation’s $360m spent to establish its first Latin American office in São Paulo, Brazil, following the continuous expansion of the Asian government’s direct real estate portfolio in the country.
Tokyo and Seoul follow in second and third places, respectively. The Japanese financial hub originated a total of $1.28bn and 25 projects, while $854m were spent across 20 projects by firms headquartered in the South Korean capital.
