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S I T E S E L E C T I O N MAY 20174 MAY 2013 S I T E S E L E C T I O N

C O V E R S T O R Y

To

REPORT

GLOBAL

ite Selection is pleased to

present its th annual Best toInvest rankings o nations andmetro areas or investment-

attraction activity in 2012. The national

Investment Promotion Agencies and metroareas recognized here were particularlysuccessul in 2012 at attracting capitalinvestment projects both expansions oexisting acilities and new projects rom

investors at home and abroad.The editors welcome the participation

o: (1) Amsterdam-based FDI advisoryInvestment Consulting Associates(ICA) and its LocationSelector.com FDIsotware solution, a comprehensive suiteo market analysis tools and research usedby corporate executives and site location

experts worldwide; and (2) IBM GlobalBusiness Services and Brussels-basedIBM-Plant Location International,

which tracks global fows o oreign direct

investment and publishes an annualGlobal Location Trends report.

MethodologyFity percent o the national rankings

were based on growth in new acilities,capital investment and job creation us-

ing data rom Conway Datas New Plantdatabase and rom IBM-PLIs database onew projects or calendar years 2 011 and2012. Each country was ranked on the

total number o projects, investment andjobs created both as raw value and as a per

capita value.The other 50 percent o the ranking was

based on the Location Rank and Competi-tiveness Score resident in LocationSelec-tor.coms proprietary database using theseactors: business costs, economic strength,

inrastructure; regulatory burden; and taxrates.

Fity percent o the metro rankingswere based on growth in new acilities,

capital investment and job creation usingdata rom Conway Datas New Plant data-

base and rom IBM-PLIs database o newprojects or calendar years 2011 and 2012.

The other 50 percent was based on theLocation Rank and Competitiveness Scoreusing LocationSelector.coms proprietarydatabase using these actors: economic

strength and inrastructure (physicalcapital). Additional points were given tothose metros that ranked among the top25 metro destinations or Foreign Direct

Investment Projects as identied in IBMsGlobal Location Trends report.

Site Selection congratulates thecountries, national investment promotion

agencies and metros recognized here ortheir success in attracting oreign directinvestment in a global economy that re-mains lukewarm.

Capital investors only invest where theyare condent they will earn a meaningulreturn, and these locations deliver thatcondence.

Editor

S Western EuropeTop Countries1. Ireland

IDA Irelandwww.idaireland.us/

2. GermanyGermany Trade & Investwww.gtai.com

3. France

Invest in Francewww.invest-in-rance.org

4. Finland

Invest in Finlandwww.investfnland.f

5. NetherlandsNetherlands Foreign

Investment Agencywww.nfa.nl/

Top Metros

1. Frankurt, Germany

2. Paris, France

3. Dublin, Ireland

4. Madrid, Spain

5. Barcelona, Spain

6. Vienna, Austria

7. London, UK

8. Berlin, Germany

9. Amsterdam, Netherlands

10. Birmingham, UK

Eastern EuropeTop Countries

1. Slovak RepublicSlovak Investment andTrade Developmentwww.sario.sk

2. Czech Republic

CzechInvestwww.czechinvest.org

3. RomaniaRomania Trade and Investwww.romtradeinvest.ro

4. HungaryITD Hungarywww.investfnland.f

5. Poland

Invest in Polandwww.paiz.gov.pl

Top Metros

1. St. Petersburg, Russia

2. Moscow, Russia

3. Istanbul, Turkey

4. Bucharest, Romania

5. Warsaw, Poland

6. Vilnius, Lithuania

7. Budapest, Hungary

8. Prague, Czech Republic

9. Ankara, Turkey

10. Krakow, Poland

PLANT LOCATION INTERNATIONAL

Arica & Middle EastTop Countries

1. Saudi Arabia

Saudi Arabian GeneralInvestment Authoritywww.sagia.gov.sa

2. South AfricaTradeInvest South Aricawww.tradeinvestsa.co.za

3. EgyptMinistry o Investmentwww.investment.gov.eg

4. Israel

Invest in Israelwww.investinisrael.gov.il/

5. UAEDubai Dev. & Investment Autwww.emiratesreezone.com

Top Metros

1. Dubai, UAE

2. Nairobi, Kenya

3. Pretoria, South Arica

4. Port Elizabeth, South Arica

5. Dammam, Saudi Arabia

6. Johannesb urg, South Arica

7. Kinshasa, Congo

8. Ras Al Khaimah, UAE

9. Casablanca, Morocco

10. Cairo, Egypt

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76 MAY 2013 S I T E S E L E C T I O N

Latin AmericaTop Countries

1. MexicoProMxico Trade and Investmentwww.promexico.gob.mx

2. Brazil

ApexBrazilwww.apexbrasil.com.br

3. Chile

Chilean Econ. Dev. Agencywww.hightechchile.com

4. ColumbiaProexportwww.investincolombia.com.co/

5. ArgentinaInvest in Argentinawww.inversiones.gov.ar

Top Metros

1. Sao Paulo, Brazil

2. Buenos Aires, Argentina

3. Mexico City, Mexico

4. Monterrey, Mexico

5. Bogota, Colombia

6. San Jose, Costa Rica

7. Rio de Janeiro, Brazil

8. Lima, Peru

9. Santiago, Chile

10. Guadalajara, Mexico

Asia-PacifcTop Countries

1. Singapore

Singapore Econ. Dev. Boardwww.sedb.com

2. Malaysia

Malaysian InvestmentDevelopment Authoritywww.mida.gov.my

3. Australia

Austrade

www.austrade.gov.au/invest

4. Taiwan

Invest in Taiwanwww.investtaiwan.nat.gov.tw

T5. ThailandThailand Board o Investmentwww.boi.go.th

T5. China

Invest In Chinawww.di.gov.cn

Top Metros

1. Singapore

2. Shanghai, China

3. Beijing, Cina

4. Sydney, Australia

5. Tianjin, China

6. Chennai, India

7. Suzhou, China

8. Shenzhen, China

9. Osaka, Japan

10. Dalian, China

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78 MAY 2013 S I T E S E L E C T I O N S I T E S E L E C T I O N MAY 201

O the ve countries attending Marchs BRICS summit inSouth Arica, only one could boast a growth rate signicant-ly higher than 5 percent.

That was China, and although its current growth o about 8

percent is less than hal the 20-percent rate seen in headier days,

it goes some way to explaining why it is still attracting serious

money amid a worldwide slump in oreign direct investment

(FDI).

Firstly, its the 300- to 400-million middle class consumers in

China. They have more money to spend and want a better lie. For

this better lie, the government must improve healthcare, trans-

portation and everyday living needs. On top o this, they need

more energy, cleaner air and water, and more ood, says Stanley

Chao, managing director o Los Angelesbased All In Consulting

and the author o Selling to China: A Guide to Doing Business in

China or SMEs.

Secondly, the government is on a continued spending spree

to maintain the 8- to 10-percent GDP growth. Theyll continue to

import cement, raw materials and anything industrial to keep up

with this hyper growth.

No Time for ComplacencyNevertheless, China has not been immune to the FDI down-

turn. In February, the Ministry o Commerce said China received

$9.27 billion o FDI in January, a drop o 7.3 percent year-on-year.

Fourteen o the past 15 months have seen a year-on-year decline.

China is doing better than some other countries, but we

cannot aord to be complacent, and we ace many challenges.

How we plan or the u ture will be crucial or our success, says

Lang Dong, vice-chairman o the Tianjin Economic-Technological

Development Area (TEDA), one the development zones that have

helped drive Chinas meteoric rise.

Langs prudence is underwritten by continuing large-scale

investments rom across the spectrum, with technology and the

service sector making particularly strong showings recently.

For example, General Nice Group, a resources and logistics

rm, has invested over $50 million in establishing a presence at

TEDA, while China Industrial Leasing input an investment o $50

million in the zone. The geo-engineering rm OYO Corporation

set up a joint venture with an investment o $6.5 million. World-

recognized security sotware rm McAee also recently set up

a new plant at TEDA . This year has also seen increases in TEDA

investments by Samsung (an extra $110 million); Japanese drink

maker Pocari (a urther $65 million); Shell Lubricant (an extra

$40 million ) as well as Belgiums Betaence and Dow Chemical

Tianjin Holdings.

According to the Ministry o Commerce, manuacturing is

still attracting increasing FDI, but it is being outperormed by

the service sector. The Ministry also reported FDI rom the US

and Japan was down about 20 percent in January year-on-year,

but FDI rom the EU was up 82 percent, including a massive

4,000-percent jump in investment rom Sweden and a 350-per-

cent increase rom Denmark, both leaders in the high-tech and

green energy sectors.

Arnaldo Abruzzini, secretary-general o Eurochambres, the

association o European chambers o commerce, told the China

Daily newspaper that smaller European companies now believe

the time is ripe or them to invest in China.

Middle Class, Development Zones Drive FDI to China

Meanwhile, big western MNCs are also maintaining high lev-

els o investment, according to Ravi Ramamurti, director o the

Center or Emerging Markets at Northeastern University.

For a country like China that already has many MNCs invest-

ing in it, the key is to keep those companies happy so that their

strategies evolve as China evolves. I think this is happening to a

large extent, which is why inward FDI into China is still strong,

he says.

FDI MagnetsMany o the big MNCs have chosen to locate in development

areas such as TEDA, which o er advantages such as excel-

lent national and international transport links, modern acili-

ties, business-riendly regimes that ast-track bureaucracy and

international-class accommodations, hospitals and schools.

TEDA is among the rst generation o development zones and

is ranked top overall among all Chinas industrial parks or 15

consecutive years. The zone has about 5,000 oreign-invested

companies (including 85 Fortune 500 companies), with total

oreign investment o $79 billion, and more than 10,000 Chinese

rms.

But it aces sti competition rom development zones in cen-

tral and western China, which oer lower costs.

The Ministry o Commerce says more FDI is fowing into

central and western regions, although they still only account or

about 20 percent o all FDI into China.

Coastal economic zones have responded by working hard to

move up the value chain. At TEDA that means oering MNCs ac-

cess to the core support systems that they need.

By 2015, TEDA hopes to build industrial chains in electronic

automotive, petrochemicals, machinery equipment and the oo

industry, each with an industrial output o more than $15 billio

AII those industries have enormous appeti tes or specialize

parts and labor, and or services such as logist ics, customs an

shipping, which are easier to ll inside the economic zones. Th

large zones have clustered these small companies together, a

access to their services makes it much easier or oreign r ms

produce in China.

We have made a great eort to attract top employees and

have them stay in TEDA, and we are working to improve the liv

environment inside the zone. The ability to oer a high quality

lie or the whole amily will be key or our uture, says Lang.

TEDA expects to attract $5.5 billion in FDI this year, represe

ing 10 percent year-on-year growth.

Admittedly, rising salary costs are having an impact across

country. And that pressure is set to intensiy because the supp

o young workers is orecast to shrink by 20 million to 505 millio

by 2015 and a urther 22 million by 2020.

Analysts such as Hannah Levinger o Deut sche Bank argue

that millions o workers earning more money will be good or C

na because they may create a growing consumer market, whic

in turn will catalyze more FDI as oreign rms target the new

consumers, while greater competition or labor will encourag

rms to turn to high-tech manuacturing and nd eciencies.

The unit labor cost increases in industrial sectors may

contribute to the needed shit in Chinas growth model, wrote

Levinger in a research note published in March.

b y T O M S P E N D E R a n d A D A M S K U S E