Singapore firms led US' investments in Asia in 2017

Investments grew 7.41% to US$274.26b, surpassing China and Japan.

Singapore continued to eat up the largest share of the United States’ direct investments in Asia, data from the Department of Commerce revealed. US investment in Singapore grew 7.41% from US$255.34b in 2016 to US$274.26b in 2017, surpassing investments in China (US$107.6b) and Japan (US$129.1b).

The US’ direct investment in Asia rose by US$60.07b (9.33%) from US$881.13b in 2016 to US$941.2b. Sarah A. Stutzman, author of the Survey of Current Business for August 2018, added, “The largest increases occurred in Singapore, Hong Kong, and China.”

Overall, direct investments from the US in all countries jumped by 7.6% to US$6.01t. The growth in 2017 mostly reflected reinvestment of earnings in ongoing operations and valuation as well as other changes.

Five countries accounted for more than half of US multinational enterprises’ investment in 2017: the Netherlands, the UK, Luxembourg, Ireland, and Canada. Singapore took up 4.5% of the global total.

Outward direct investment position increased in five of the six major geographic areas. US parent companies’ investment in their European affiliates had the largest dollar and percentage increases, followed by affiliates in the regions of Latin America, Other Western Hemisphere, and the Asia Pacific. Africa was the only major area to experience a decrease in the outward position.

In contrast, Singapore’s investments in the US fell 1.2% from US$23.58b to US$22.36b. This is based on data sorted by the country of each member of the US parent.

“The tax policy environment was particularly uncertain in the United States in 2017 compared with that in other countries. The prospect of US tax law changes, which were passed at the end of 2017, may have slowed down inward investment, particularly for investments structured—at least in part—to take advantage of lower tax rates abroad,” Stutzman said.

Overall, the US’ inward investment position valued at historical cost grew 6.9% in 2017, down from 12.2% in 2016.

Meanwhile, Asia’s direct investment in the US on an ultimate beneficial owner (UBO) basis grew by US$67.7b to US$793.6b in 2017. The largest increases were from Japan (54.6%), South Korea (9.4%), and Singapore (5.8%).