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Chinese Foreign Direct Investment in Myanmar (Case Study) 2012

Chinese Foreign Direct Investment in Myanmar (Case Study) 2012

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Source: Data from Chinese Ministry of Commerce’s 2010 Statistical Bulletin of China’s Outward Foreign

Direct Investment

Figure 5.11 allows a more precise view of the levels of stocks due to the variance in
the scale of the vertical axis. Myanmar ranks 12th

in terms of worldwide stocks from
China, but the top 11 reveal a diverse range of nations. Three of them, in particular the
British Virgin Islands, Cayman Islands, and Luxembourg, hold minute populations,
possess an extremely small (if any) overseas Chinese community, and contain few (if
any) natural resources; however, they are all well-known international banking hubs and
tax havens. The other entities classify as developed nations, though their totals are not as
staggering as expected. “Even if the actual figures are higher because of routing via tax
havens, China’s FDI in the developed world, especially Europe and North America, is
disproportionately small considering the high proportion of China’s trade with these

regions. This probably results more from a lack of readiness to compete with global
giants on their home territory than from protectionist pressures, though these have
discouraged some large acquisitions” (Davies 2009). Therefore, Figure 5.11 further
strengthens the argument that Myanmar holds importance on the global level in terms of
the sum of total investment, but I want to examine if economic interest is still in
proportion to its stock levels, and I can determine that by comparing flow totals.

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Nations with Highest Stocks in 2010
(Minus Hong Kong)

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Figure 5.12 Countries/Regions with Largest Gross Outward FDI Flows from China in
2010

Source: Data from Chinese Ministry of Commerce’s 2010 Statistical Bulletin of China’s Outward Foreign

Direct Investment

Similar to the stock totals, Hong Kong enjoys the highest amount of inward flows
from China and holds over seven times the amount of gross dollars compared to the
second place finisher, the British Virgin Islands, which is similar in nature to the third
place nation, the Cayman Islands. Figure 5.12 displays the same issues with
comparability due to Hong Kong’s massive total like in Figure 5.11, so Figure 5.13
removes Hong Kong and shifts the nations over.

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Countries/Regions with Largest Gross
Outward FDI Flows from China in 2010

(Millions of Dollars)

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Figure 5.13 Countries (Minus Hong Kong) with Largest Gross Outward FDI Flows from
China in 2010 (Millions of dollars)

Source: Data from Chinese Ministry of Commerce’s 2010 Statistical Bulletin of China’s Outward Foreign

Direct Investment

After readjusting the scale on the vertical axis, it now becomes easier to interpret.
Myanmar jumps two spots to number 10 in terms of worldwide flows from China, and
this figure solidifies the argument that the rate of economic interest lines up with the sum
of economic interest. Curiously, the United States ranks seventh, and is wedged between
other developed nations, namely Sweden and Canada. There is only one least developed
country in the top ten—Myanmar. Every other country in the list is a developed Western
entity, with Singapore arguably being the only exception. As the only other Asian nation,
Singapore’s advanced international, integrated, and booming economy, however,
separates itself from that of Myanmar. No rapidly advancing country is found on the list,
and population certainly plays no role in how China chooses to invest—India does not
even score close enough to appear here, and a country of 25 million people (Australia)
trounces a country of over 300 million (United States). I need to be careful here though
not to put too much importance on these outward FDI flows; I am not arguing that China
does not deem other countries to be important or play an active role in politics or
economics, but rather China has determined that these top ten countries are strategically
important for securing its interests in 2010.
In summary, from both a regional and international perspective, it is clear that
Myanmar should be classified as a unique case. Its position is not only vital for China in
a Southeast Asian context, but also for the global perspective at large, as it now outranks

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Countries (Minus Hong Kong) with Largest
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(Millions of Dollars)

38

most countries in terms of both flows and stocks. FDI from China has changed the
economic nature of China’s relationship with Myanmar which will undoubtedly spawn
several political and economic consequences in both the region and larger international
community.

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