Globalization of the economy
Foreign direct investments
by the US., Europe and Asia reshape the global economy

Four trends were evident in investments made in the global economy in the 1980s.

1) The three key players, the US, Europe and Japan were playing even larger roles in the global economy. Japan joined the ranks of the world's leading investors.

2) Intra-regional investment increased in both Europe and in Asia, particularly in East Asia. European investors shifted their interest once again to the European market. They saw that the integration of Europe into a single market under the EU would create a very attractive market. In East Asia, Asian NIEs became major investors in the region. This provided the region with greater resources on which to build more manufacturing facilities.

3) Investment in non-manufacturing sectors increased dramatically. Investments in financial services, housing, office and commercial properties as well as in services relating to travel and leisure facilitated the globalization of the economy.

4) In the manufacturing sector, investments were made in order to avoid further trade conflicts.

The demand for direct investment has remained strong in the 1990s as well. Although direct investment from Japan in the early 1990s suffered stagnation as a result of bursting of the so called bubble economy, Japanese investment has begun increasing again in the last few years. Investment demand has been strong particularly in Asia where there has been continuous regional growth.

[In Perspective] [Contents: Globalization of the economy]