RE:India's Copper Demand to Outstrip Global Growth MUMBAI/HANOI -- India led a survey of Japanese manufacturing companies about promising countries or regions for business development for the second year in a row, as China slipped to third place behind Vietnam.
The Japan Bank for International Cooperation on Thursday announced the results of the survey, which received responses from 534 manufacturers in fields like automobiles, chemicals and electronics.
When asked about promising countries for development in the medium term, with multiple answers allowed, India came in first with 48.6%, with the most common reason being the local market's growth potential.
Shinichi Itagaki, director of JBIC's strategic research department, cited the "deterioration of China's investment environment" (note: this stands in contrast to Jakob's and Dominic's expressed hope for China). as contributing to India's strong performance in the survey. He also noted the South Asian country's population growth and infrastructure improvements.
Only 28.4% of the companies rated China as promising, its lowest score ever. The country had ranked first or second in the yearly survey since 2015. China's increasing tensions with the U.S., its economic slowdown and the strengthening of anti-espionage laws were factors.
Vietnam rose from fourth place to second with 30.1%, receiving high praise for its cheap yet skilled workforce. Though local salary levels have been rising yearly, Japanese companies still show "little concern about rising labor costs," Itagaki said.
Many local Japanese governments, including Gunma, Shiga and Tochigi prefectures, sent delegations to Vietnam this year. Manufacturing companies made up the majority of the delegations, but one source from Gunma Bank noted that "domestic demand-oriented companies are also paying attention."
Yet the proportion of companies with concrete investment plans in Vietnam is lower than in India and China. For now, Vietnam appears to be seen as a top potential destination for transferring business out of China.