Position of Vietnam, Indonesia, and Malaysia in the Competition for Attracting FDI

Abstract

Features of modern world development are associated with a changing role of developing countries in the competition for foreign direct investment. This article shows that the transformation of China's domestic policy and its transformation into a new regional leader in Asia has led to a change in the position of Vietnam, Malaysia, and Indonesia as recipients of foreign direct investment. Characteristics of China's economic development in recent years, namely the high growth rate of urbanization, "building a middle-class society" and the elimination of rural poverty, fundamental changes in environmental policy at the state level, the introduction of universal modernization of production, and so on -all this has led to an increase in cost placement of value chains in China. The purpose of this article is to show how Vietnam, Indonesia, and Malaysia has become the leading recipients of foreign direct investment in Southeast Asia. The research methodology is based on the principles of system analysis and an interdisciplinary system approach. To achieve this goal, the study used empirical methods (collection, study, and comparison of data), methods of comparative analysis and generalization of statistical data, principles of formal logic. As the result of the research, following the successful example of China in adapting conditions for foreign direct investment, Vietnam and, to a lesser extent, Malaysia are ahead of most other Asian countries because it has always adhered to an export-oriented growth strategy, but Indonesia was not able to respond in a timely manner to the changing economic landscape.

The Belt and Road Initiative as a New China’s Foreign Economic Policy towards the ASEAN Countries

“…China's economic rise over the past decade, caused conceptual changes in the characteristics of direct foreign investment: high urbanization growth rates, "building a middleclass society" and the elimination of rural poverty, fundamental changes in environmental policy at the state level. This is what has allowed Vietnam, Indonesia and Malaysia to gain new competitive advantages and also become the leading recipients of foreign direct investment in Southeast Asia (Andronova et al, 2020). Thus, China has been able to become an important a partner for ASEAN as Japan and the United States, entering all the main dialogue platforms and initiatives developed by the Association (Fainshmidt, 2018).…”