Tom Becker is an economist at the United Nations Economic and Social Commission for Asia and the Pacific, and Martin Kaspar is head of business development at a German Mittelstand company.

US and European policy-makers seem to be increasingly wary of trade with China and foreign investors taking over domestic firms and infrastructure. Protectionism and trade wars have come to dominate the public debate. The hope of free trade has given way to a lingering pessimism about its prospects. 

This sentiment, however, is not shared within the wider Asia-Pacific region, where the overall picture is not quite so gloomy. Not without setbacks, Asian countries, especially those experiencing solid growth rates, continue to open up their economies to foreign investment.

According to our own calculations based on data from Unctad’s Investment Policy Hub, about 75% of investment policy measures enacted in Asia-Pacific between 2021 and 2023 have been liberalising in nature. Among them, the Philippines established Green Lanes for strategic investments, after also having allowed 100% foreign ownership in the renewable energy sector; Sri Lanka removed obstacles and bureaucratic bottlenecks in its foreign investment approval processes; and Malaysia announced the Strategic Investor Pass for investors to enter the country on a multiple-entry basis much like Indonesia’s ‘golden visa’ programme.

FDI figures seem to back up the idea that major Asian economies are opening up and embracing cross-border investment. In an era of stagnating FDI flows, foreign investors announced $448.8bn-worth of investment projects across the Asia-Pacific region in 2023, way above pre-pandemic levels and the highest figure since 2008, according to figures from fDi Markets. Interestingly, analysis by the United Nations Economic and Social Commission for Asia and the Pacific found that “locations in Asia-Pacific are being increasingly chosen due to dynamic qualitative factors, such as a skilled workforce, rather than static quantitative factors, such as low-cost considerations”. 

If in absolute terms, FDI into Europe seems to be holding together too. A closer look at it adds nuances to the analysis. Comparing Asean and the EU in terms of FDI as a percentage of GDP, our calculations show that the Asean region has experienced strong levels of growth over past decades, while EU countries have seen their share of FDI as a percentage of GDP in continuous decline. 

This is happening as the EU intensified efforts to implement “more guarded international dealings” (aka screening mechanisms). This can either be measures related to the monitoring of cross-border trade to protect domestic industries, or FDI screening, focusing on investments made by foreign entities. While initially only focusing on inbound flows, the discussion is increasingly also extending to outbound trade and investment screening. 

FDI’s relatively lower importance in European economies, combined with the mounting narrative that certain types of FDI are something Europe should monitor and protect from, are feeding a prevailing European pessimism about the fate of global markets. However, as pointed out also by a number of trade and investment experts such as Simon Evenett, Mia Mikic and Simon Lacey, by no means does this exist to the same extent in the emerging economies of the world. 

It is therefore important to remember that a lot of the debate surrounding globalisation is driven by more western-centric rhetoric and perception, potentially a perception also driven by different approaches to the geopolitical challenges of our day. 

Asia’s leaders are mostly being less partial with regards to the current theatres of conflict, typically courting both governments and companies from the west and Asia, as well as all political camps, for example, the Thai Prime Minister Srettha Thavisin’s meeting Russian President Vladimir Putin to discuss increasing trade relations, while also reviving trade talks with the EU. Indonesia simultaneously discussing deepening economic ties with China and the US under the US-Indonesia Comprehensive Strategic Partnership is another example. 

Overall, the evidence strongly suggests that deglobalisation may not be happening on a global scale. After all, there are Asian countries that are still liberalising, and seeking to remain a global destination for greenfield FDI.

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