For use of information media - Not an official record
Asian Corporations Dominate List of Top 50 Transnational Corporations from Developing Countries

15 September 1999

Despite the Asian financial crisis, the overall flow of foreign direct investment (FDI)(1) by transnational corporations (TNCs)(2) into the Asia-Pacific(3) region proved to be resilient in 1998. At US$85 billion the total volume of inflows was 11 per cent down on the 1997 record (table 1); nevertheless, last year’s total was the second highest ever and was about US$3 billion up on 1996, according to World Investment Report 1999: Foreign Direct Investment and the Challenge of Development(4), published today by the United Nations Conference on Trade and Development (UNCTAD).

As in past years, the overall total was highly affected by FDI flows into China which received FDI flows of about US$45.5 billion, exceeding the previous year’s level by US$1 billion according to revised estimates. China not only accounted for well over half of total FDI flows into the region, but was the third largest recipient in the world behind only the United States and the United Kingdom.

While flows into China from other countries in the region fell, those from the United States gained 21 per cent. Faced with a number of adverse factors, including the Asian crisis, the Chinese Government intensified its efforts to attract FDI. For example, it revised its guidelines for FDI, while introducing several incentive programmes. Whether overall FDI into the Asian-Pacific region declines further this year may largely depend on China’s ability to continue to attract substantial amounts of FDI as well as on the resumption of growth by the larger economies in the region.

Against the background of the Asian crisis, UNCTAD notes that the Republic of Korea received its largest ever volume of FDI inflows at US$5.1 billion, a four-fold gain over its annual average in the first half of the 1990s, and US$2.3 billion above the 1997 volume. The country became a net recipient after having been a net FDI outflow country since the start of the decade.

Outflows of FDI from the Republic of Korea last year were seven per cent up on 1997, at US$4.8 billion, mainly due to a sharp increase in financing directly from headquarters of existing overseas operations and ongoing investment projects.

But, for the region as a whole, the volume of outflows was down 24 per cent to US$36 billion. WIR99 notes that over the past decade, TNCs owned by overseas Chinese as well as Korean chaebols have been two major forces for outward FDI. The former in particular suffered heavy losses from the financial crisis. For instance, the market capitalization of the assets owned by the top 500 overseas Chinese firms (based on a list of the top 500 international Chinese firms, published by Asia Weekly in November 1998), were reduced by nearly half last year.

The picture of FDI flows into South-East Asia was a mixed one last year, with the crisis having a significant impact on some countries. Inflows to Malaysia were down 27 per cent, while Singapore experienced a 26 per cent drop. Hardest hit of all was Indonesia, where FDI inflows turned negative with divestment of US$356 million, compared to inflows of US$4.7 billion in 1997. By contrast, rising levels of mergers and acquisitions pushed inflows to Thailand to close to US$7 billion, a more than US$3 billion gain on 1997. The Philippines also enjoyed record inflows.

South Asia is seen by UNCTAD as having considerable unutilized potential to attract FDI. It notes that Bangladesh experienced fast growth of FDI inflows in 1998, particularly in energy. However, flows into India fell by around US$1 billion to total US$2.3 billion in 1998.

Low oil prices last year impacted FDI into West Asia, with 1998 volume remaining almost the same as in 1997, at US$4.6 billion. However, WIR99 observes that: "Plans to expand oil and gas production capacity in Kuwait, Oman, Qatar, United Arab Emirates and Yemen, and the opening up of the petroleum sector to foreign investors in Kuwait and the Islamic Republic of Iran should lead to increased FDI."

The momentum of FDI inflows into Central Asia was lost last year as the overall total stagnated at US$3 billion. Again, high dependence on the oil sector influenced the flows. The difficulties of attracting FDI here were increased by the crises in Asia and in the Russian Federation.

WIR99 reports gains in 1998 FDI flows to the developing island economies of the Pacific, rising to US$175 million from US$146 million in 1997. Australia, New Zealand and Japan were the main sources, while several European and United States TNCs remained important. Just over half of the inflows went to Fiji at US$91 million, followed by Papua New Guinea at US$30 million and Vanuatu at US$28 million.

Top TNCs from developing Asia

By far the largest number of leading firms on UNCTAD’s latest list of the 50 largest TNCs from developing countries (measured in terms of foreign assets) were from Asia (30). Six of the top 10 are headquartered in Asia. Firms from Hong Kong, China, Republic of Korea, and China dominate the list with estimated foreign assets accounting for almost 60 per cent of the total foreign assets of the 50 top TNCs from developing countries.


1. Foreign direct investment is defined as an investment involving management control of a resident entity in one economy by an enterprise resident in another economy. FDI involves a long-term relationship reflecting an investor’s lasting interest in a foreign entity.

2. Transnational corporations comprise parent enterprises and their foreign affiliates: a parent enterprise is defined as one that controls assets of another entity or entities in a country or countries other than its home country, usually by owning a capital stake. An equity capital stake of at least 10 per cent is normally considered as a threshold for the control of assets in this context.

3. All countries in geographic Asia and the Pacific, except Japan, Australia and New Zealand.

4. The World Investment Report, 1999 (Sales No. E.99.11.D.3, ISBN 92-1-112440-9) may be obtained at the price of US$49, and at a special price of US$19 for customers in developing countries, from United Nations Publications, Sales Section, Palais des Nations, CH-1211 Geneva 10, Switzerland, F: +41 22 917 0027, E: unpubli@un.org, Internet: www.un.org; or from United Nations Publications, Two UN Plaza, Room DC2-853, Dept. PRES, New York, N.Y. 10017, USA; T: +1 212 963 83 02 or +1 800 253 96 46, F: +1 212 963 34 89, E: publications.un.org.

For more information, please contact:
Chief, Karl P. Sauvant
International Investment Transnationals and Technology Flows Branch
Division on Investment, Technology and Enterprise Development, UNCTAD
T: +41 22 907 57 07
F: +41 22 907 01 94
E: karl.sauvant@unctad.org
Chief, Carine Richard-Van Maele
Press Unit UNCTAD
T: +41 22 917 5816/28
F: +41 22 907 0043
E: press@unctad.org.


Please wait....