BOAO, Hainan, April 21 (Xinhua) - An emerging Asian market has shown increasing magnetism to foreign investors as it is geared by robust development of the global electronic industry and the rapid economic growth in China and India, according to a report released at the 2006 annual meeting of Boao Forum for Asia (BFA) here Friday.

    The direct foreign investment to the Asian market has witnessed a steady growth in recent years, and has replaced Latin America to become the developing region which attracted the biggest foreign investment, according to the Annual Report 2006 of Economic Integration in Asia, which was released by the Institute of Boao Forum for Asia (BFA).

    It is "one of the striking findings"that some low-income countries are receiving significant capital flows relative to their size, said Long Yongtu, the secretary-general of BFA. He said that creation of suitable investment climate through a public-private partnership always seems to play a crucial role in attracting both domestic and foreign investment in all countries.

    In Asia, China and India are both among the top countries receiving biggest foreign investment. China has always been the largest developing country recipient of foreign direct investment since the early 1990s, said experts from the institute of BFA. Meanwhile, foreign investment in India has also been on a steady rise in recent years, as investors have been attracted by the country's strong economic growth and huge domestic market.

    Foreign direct investment inflows to some small, low income countries in Asia have also been significant, according to the report. "The direct investment in Vietnam as a share of GDP has exceeded most of the countries in the region, including China. Cambodia, Laos, the Philippines and Thailand also received large amounts of foreign direct investment relative to their economic scale," the report said.

    The huge magnetism of the emerging Asia to foreign investors is closely related to the world trend of the development of the global manufacturing system and the transition of the labor-intensive industries to the region. Different from the other regions, the foreign direct investment to Asia mostly focuses on the manufacturing sector. Many European and American companies are transferring their manufacturing factories to the low-cost Asian countries. Judging from the statistics of the foreign direct investment, China has already become the most important country as the last ring of assembly and processing in the global production chain.

    The growth of foreign direct investment has also benefited from the efforts made by various Asian countries to improve the investment environment. Citing Vietnam as the most typical example, the report said that Vietnam has taken a series of actions to improve its investment climate for foreign and domestic investors, including a new Enterprise Law to facilitate the entry of new firms, protect business from bureaucratic interference in their operation, increase flexibility to expand business operations, and improve corporate governance.

    As a result, Vietnam received 5.8 billion US dollars in 2005, up 25 percent over the year 2004, hitting the highest point since 1998, according to statistics from the country's ministry of commerce. Enditem