Foreign direct investment entails investment in a company in a given country by a company or individual from another country. Often, FDI is the top source of external funding for developing economies. Furthermore, FDI recipients may attain benefits such as job creation and the influx of technical knowledge.
Southeast Asia has benefited from increased foreign investment in recent years. In fact, during 2013, FDI in five Southeast Asian nations outpaced FDI in China for the first time. The five nations (Indonesia, Singapore, Malaysia, the Philippines, and Thailand), which are collectively known as the ASEAN-5, received more than $125 billion in foreign investment in 2013. During that period, FDI in China dropped by 2.9 percent to less than $120 billion. At the same time, China has grown to be the third largest foreign investor in the world, with much of its investment directed to the nearby Southeast Asian economies.