China, because of its increased labor costs, has been overtaken by India as the most attractive overseas investment destination for Japanese manufacturers for the next decade, according to a recent survey by the Japan Bank for International Cooperation.
China, however, remained the most popular investment destination looking forward to the next three years in the survey conducted last summer.
The government-backed financial institution has been holding the survey since 1992.
The result suggests an increasing number of Japanese companies are aiming to diversify their offshore investment amid caution about rising labor costs and anti-Japanese demonstrations in China. An additional survey conducted in November in the wake of the Senkaku Islands row provided further evidence of this trend.
China no longer dominates Japanese foreign investment and companies “are increasingly turning their attention to such (emerging) markets as India and Vietnam,” said JBIC economist Toshiharu Mimura.
In the survey, which allowed multiple responses, 74.9 percent of the 605 manufacturers picked India as an investment destination over the next 10 years, compared with 71.7 percent that named China. Last year, China was first and India second.
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