asian development review - volume 26, number 2

7/27/2019 Asian Development Review - Volume 26, Number 2

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Symposia/Workshop on Outward Foreign Direct Investment

from Developing Asia

Outward Foreign Direct Investment and the Financial Crisis

in Developing East Asia

Hal Hill and Juthathip Jongwanich

New Multinationals from Emerging Asia: The Case of National Oil Companies

Andrea Goldstein

Developing Asias Sovereign Wealth Funds and Outward Foreign Direct Investment

Donghyun Park and Gemma Estrada

A Comparative Empirical Examination of Outward Foreign Direct Investment

from Four Asian Economies: Peoples Republic of China; Japan; Republic of Korea;

and Taipei,China

K. C. Fung, Alicia Garcia-Herrero, and Alan Siu

Foreign Direct Investment by the Republic of Korea

in the Peoples Republic of China

Mannsoo Shin, Hafiz Mirza, and Kyu-Nam Kim

Outward Foreign Direct Investment from India

Prema-chandra Athukorala

Volume 26 2009 Number 2

ASIANDEVELOPMENT

REVIEW


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AsiAn Development

Review Editor Jong-Wha Lee

ManagingEditor Douglas H. Brooks

AssociateEditors Rana Hasan

William E. James

Juzhong Zhuang

Joseph Ernest Zveglich, Jr.

CopyEditor Patricia Wada

EditorialAssistant Fatima de Ramos

EditorialBoard

JUSTIN YIFU LIN, World Bank, Washington, DC

SEIJI NAYA, University of Hawaii at Manoa

MARTIN RAVALLION, World Bank

AMARTYA SEN, Harvard University

BINAYAKSEN, World Bank

HADI SOESASTRO, Centre for Strategic and

International Studies, Jakarta

BYUNG-NAKSONG, Seoul National University, Korea

CHALONGPHOB SUSSANGKARN, Thailand

Development Research Institute

CHIA SIOW YUE, Singapore Institute of International

Affairs

MONTEKAHLUWALIA, Planning Commission, India

MOHAMED ARIFF, Malaysian Institute of Economic

Research

JERE BEHRMAN, University of Pennsylvania

PRANAB BARDHAN, University of California, Berkeley

NANCY BIRDSALL, Center for Global Development

RAUL V. FABELLA, University of the Philippines

YUJIRO HAYAMI, GRIPS/FASID Joint Graduate

Program, Tokyo

ULRICH HIEMENZ, Center for Development Research,

University of Bonn

LAWRENCE LAU, Chinese University of Hong Kong

TheAsian Development Review is a professional journal for disseminating the results of economic and

development research carried out by staff and resource persons of the Asian Development Bank (ADB). The

Review stresses policy and operational relevance of development issues rather than the technical aspects of

economics and other social sciences. Articles are intended for readership among economists and social scientists

in government, private sector, academia, and international organizations.

TheReview also invites contributions from external scholars and researchers dealing with Asian and

Pacic development issues. All submitted manuscripts are subject to review by three referees, including ADB

staff members and at least one external referee.

Opinions expressed in the Review are those of the authors and do not necessarily reect the views or

policies of ADB.

Please direct all editorial correspondence to the Managing Editor,Asian Development Review, Economics

and Research Department, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila,

Philippines.

Note: In this publication, $ refers to United States dollars.

For more information, please visit the Web site of theReview

at www.adb.org/Documents/Periodicals/ADR

Vol. 26 No. 2 2009, Asian Development Bank ISSN 0116-1105


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AsiAn Development

Review Volume26 2009 Number2

Symposia/WorkshoponOutwardForeignDirectInvestment

fromDevelopingAsia

OutwardForeignDirectInvestmentandtheFinancialCrisis inDevelopingEastAsia 1 Hal Hill and Juthathip Jongwanich

NewMultinationalsfromEmergingAsia: TheCaseofNationalOilCompanies 26 Andrea Goldstein

DevelopingAsiasSovereignWealthFunds

andOutwardForeignDirectInvestment 57 Donghyun Park and Gemma Estrada

AComparativeEmpiricalExaminationofOutward ForeignDirectInvestmentfromFourAsianEconomies: PeoplesRepublicofChina;Japan;RepublicofKorea; andTaipei,China 86

K. C. Fung, Alicia Garcia-Herrero, and Alan Siu

ForeignDirectInvestmentbytheRepublicofKorea inthePeoplesRepublicofChina 102

Mannsoo Shin, Hafiz Mirza, and Kyu-Nam Kim

OutwardForeignDirectInvestmentfromIndia 125Prema-chandra Athukorala

December2009


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Oard Forei Direc Iesme adhe Fiacia Crisis i Deeoi Eas Asia

HAl HIll AnD JutHAtHIp JOngwAnICH

Tis aer examies o ierreaed asecs o Asia ecoomic dyamismad he maaeme o exera shocks, i he coex o oard orei

direc iesme (FDI) rom deeoi Eas Asia. Oard FDI rom heseecoomies has bee roi raidy, drie by deeer ecoomic ieraio,more oe FDI reimes, roi echooica ad acia sohisicaio,ad risi sais ees. Te aer deries hese commo reio-idedeermias hie oii o a rae o cory-secic circmsaces.Ecoomic crises, sch as he Asia acia crisis o 19971998 adhe crre oba acia crisis, hae are ad redicabe eecso he behaior o FDI ad oher orms o caia o, ih he eeraexecaio ha FDI i be ess oaie ha oroio iesme. Tis hasbee cormed i boh crisis eisodes. Iesme ocomes dri he

crre crisis hae acceeraed he roi imorace o deeoi EasAsia i he oba ecoomy.

I. INTRODUCTION

Tis aer examies o isses ha are cera o he rise o he dyamic EasAsia ecoomies ad he maaeme o obaizaio dri a eriod o areexera shocks. Firs, he aer examies he rise o deeoi Eas Asia

ecoomies (i.e., Eas ad Soheas Asia excdi Jaa) as siica sorceso oard orei direc iesme (FDI). Secod, he aer iesiaeshe imac o he oba acia crisis o he aers o FDI o ad romhis reio.

Ha Hi is H. w. Ard proessor o Soheas Asia Ecoomics a Asraia naioa uiersiy.Jhahi Joaich is a Ecoomis a he Asia Deeome Bak (ADB). A earier ersio o hisaer as reseed a he worksho o Oard Forei Direc Iesme rom Deeoi Asiahed o 27 Jy 2009 a ADB Headqarers. Te ahors hak he orksho oraizer, Doas Brooks,discssa Adrea godsei, ad orksho aricias or he commes o he rs dra. Te

ahors aso hak nedey C. Maibay-Ramos or mos caabe research assisace. Te oiiosexressed are hose o he ahors aoe.

Asian Development Review, o. 26, o. 2, . 125 2009 Asia Deeome Bak


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2 ASIAn DEvElOpMEnt REvIEw

O he reaioshi beee FDI ad crises, he ierare o iard FDIosaes he e-ko re-sae heomeo: aradoxicay, FDI ios

may icrease ee hie here has bee shor-erm caia ih. Te exaaiois ha he o os are drie by diere deermiashe aer is i resoseo a erceied icrease i shor-erm risk roes, hie he ormer, hich rsesa oer-erm moie, is araced by he asse-cheaei eecs o a crisis(hroh oer rices i domesic crrecy erms ad a dereciai exchaerae) as e as a reqe by-rodc o a crisis, a more ibera FDI reime. Tisresose as docmeed a he ime o he Asia acia crisis i 19971998,exce i cories ha exerieced boh dee ecoomic ad oiica crisis,sch as Idoesia.

Te aayics ad emirica reaiies are ess cear i he case o oardFDI ad a eeraized oba crisis i 20082009. As ih rade os, FDIos are ikey o corac or simiar reasos, amey, here are eer araciecommercia ooriies, here is a icrease i risk, ace is more dic osecre, ad oba rodcio eorks may shrik. neerheess, ee crises omch deeer maide do rese ooriies or ihy idebed comaiesaraced by reay cheaeed asse rices. Tis as eide a he eary saes ohe crre crisis, he comaies rom hih-sai Asia aios sch as hepeoes Rebic o Chia (pRC) ad Siaore acqired major ieraioa

asses i he acia ad oher secors.Mos o he ierare o FDI has ocsed o iard os. Tese arebeer moiored ad measred; here is a cearer aayica rameork ididiscssio o he ros ad cos o hese os. Tey hae arosed reaer bicdiscssio, eseciay coceri he norhSoh dimesios, ad hereis a cear aayica coecio beee rade ad iesme iberaizaioad he rise o oba rodcio eorks. Oard FDI is, o corse, he iside o iard FDI. I has bee ess sdied, ary becase he daabase is esscomrehesie (eseciay i a era o oe caia accos), ess sbjec oreaory scriy, ad ess coeios oiicay. B i is o ess imora asa ed o sdy, or a eas or reasos.

Firs, here are are ier-cory diereces i oard FDI o he basis osock ad o. Js as diereces i iard FDI are sdied or ha hey reeaabo a corys oeess ad ieraioa commercia eaeme, so oo isoard FDI orhy o examiaio. Secod, as a coroary, oard FDI daa arereeai o a corys chai ecoomic srcre, is deeome dyamics,ad is ieraioa commercia eaeme. Tird, i a era here here areboh exesie ieraioa comarisos o he bsiess eirome adicreasiy ibera caia accos, oard FDI may i cerai circmsaces

be sed o ae he comaraie aracieess o a corys iesme cimae.Forh, ahoh as oed, oard FDI is eeray ess coeios ha iardos, he ormer does someimes arac aeio. I he sorce cories, here


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OutwARD FDI AnDtHE FInAnCIAl CRISISIn DEvElOpIng EASt ASIA

is occasioa cocer, rihy or roy, abo he aeed exor o jobsassociaed ih hese os. I addiio, a rece ieraioa debae has ocsed

o sraeic isses i he case o sae-direced oard FDI, aricary reaedo he aciiies o soerei eah ds (SwFs), hich maiy oriiae romcories ha are eiher are e oi exorers (riciay i he Midde Eas)or ery hih saers (e.., he pRC ad Siaore).

Deeoi Eas Asia ecomasses a rich ariey o oicy exerieces. Teradiioa assmio as ha oe rade ad FDI reimes o had i had,b his is o ecessariy he case. O he oe had, Siaore; Ho Ko,Chia; Maaysia (o a esser exe); Taiad; ad taiei,Chia israe hisroosiio. B here are obios exceios. Hisoricay, Jaa ad he Rebic

o Korea (heceorh Korea) aressiey romoed oard FDI b ere morecaios oard ios. Tey ere aso soer o iberaize heir rade reimes.Idoesia ad he phiiies hae become roressiey more oe o bohrade ad iesme oer ime, b hey ere earier mch more iard-ookiecoomies. Te ecoomies o Idochia bea o oe o ieraioa radead iesme oy rom he ae 1980s.

Measreme isses are a key chaee o ay aaysis o oard FDI.Baace o aymes esimaes measre oy ar o he os, sice hey yicaydo o icde ocay reiesed earis by a aiae, or is borrois.

Ecoomic cess daa roide he oy comrehesie esimaes, ad hesecommoy do o roide disareaio by sorce cory. Tereore, heemirica aaysis dras o he mos idey sed FDI daabase, reared by heuied naios Coerece o trade ad Deeome (unCtAD) or is WorldInvestment Reportdaabase, i addiio o cory sorce daa ad sdies.

Te aer is oraized as oos. Secio II roides a oerie o oardFDI rom his reio, ocsi o is deermias ad aers. Secio IIIexamies he behaior o hese os dri crisis eisodes. Te mos comeeexamiaio is ih reerece o he 19971998 Asia acia crisis. Te aeraso assesses deeomes dri he crre oba acia crisis, drai oboh he 19971998 exeriece ad daa hroh o eary ad mid-2009. SecioIv smmarizes he aers mai armes.

II. OUTWARD FDI FROM DEVELOPING EAST ASIA:DETERMINANTS AND PATTERNS

Te sadard heory exaii ieraioa iesme dras o he roosiioha rms iesi abroad ossess a rae o secic adaaes, ad ha hey

reer o haress hese adaaes i he orm o FDI raher ha he aeraieso exori rom heir home base or some sor o o-eqiy arraemes schas icesi, rachise, or royay areeme (Caes 1996). Tese adaaes eed


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ASIAn DEvElOpMEnt REvIEw

o be o scie maide o oercome he irisic cos disadaaes ooerai i a ess amiiar commercia eirome abroad. Te bases o hese

adaaes icde rodcio echooy, maaeria echiqes, aciako-ho, ad koede o ieraioa markes.

wih modicaios, his broad rameork ca be emoyed o imiae aariey o FDI os ad behaiors. Oe aroach emhasizes rasacios coss(Froo 199) o exai hy, ih oher his eqa, rms ies i corieshere he iormaio barriers are o. Reea acors here icde srohisorica ies (e.., cories coii o ies heaiy i heir ormer cooies),eorahica roximiy, membershi o a ecoomic associaio (aricaryi reiorced by reereia radi arraemes), ad cra or iisic

amiiariy (e.., he are ehic iesmes rom he pRC sraddi bordersi he Eas Asia reio). Tese rasacio cos adaaes are hoh o bearicary siica or sma ad emeri iesors oi o scae ecoomiesassociaed ih he acqisiio o koede coceri ieraioa iesmeooriies.

Tere are dierse moies or, ad hece driers o, FDI. A aayicayse disicio is someimes dra beee hree yes o FDI, commoyermed re-seeki, eciecy-seeki, ad resorce-seeki moies.1, 2 I hers case, someimes reerred o as he ari acory mode, orei iesors are

rimariy araced o he domesic marke o he hos cory. Tereore, ariroecio ad iesme iceies are imora deermias, ao ih abroader se o acors sch as marke size ad roh. A aria o his cass oiesmes is FDI i serices, hich by deiio are mosy o-radabe.

By coras, eciecy-seeki iesmes reer o hose ha ocae i aaricar ecoomy oi o is eciecy as a rodcio ceer as comaredo aeraie ocaios. Here, ha maers are acors sch as abor markecoss ad qaiy, irasrcre coss ad qaiy, he broader macroecoomiceirome (icdi, imoray, he exchae rae reime), ad rade oicy.Te aaiabiiy o sca iceies may maer a he mari, b hey are o hericia deermia o ocaio. Tese iesmes are by ecessiy more ikeyo be hihy exor-orieed. Miaioa eerrises (MnEs) sice herodcio rocesses across ieraioa bodaries accordi o he ecoomicso maacri ad serice roisio a each sae o he rodcio rocess.Tis orm o FDI has bee roi raidy, drie by he raid sread o obarodcio eorks, eseciay i he eecroics, aomoie, ad machiery

1Re-seeki FDI cod aso reer o marke-seeki FDI.2Di (199) roides o broad reasos hy ay rm od eae i FDI. Te rs

is o exoi is exisi asses or comeiie caabiiies (asse-exoii FDI) ad he secod iso ame hem (asse-amei FDI). Te ormer is associaed ih a iesi rm maki

se o is exisi oershi adaaes hie he aer is associaed ih a rm acqiriimora oershi adaaes ha i crrey acks. Resorce-seeki FDI, marke-seeiFDI, ad eciecy-seeki FDI ca be cassied as asse-exoii FDI.


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OutwARD FDI AnDtHE FInAnCIAl CRISISIn DEvElOpIng EASt ASIA 5

oods idsries (Ahkoraa 2006, Kimra 2006). A oe rade ad FDI reimead a ecie oisics sysem are cearysine qua nons o sch iesmes.

Resorce-seeki FDI is by deiio moiaed by he resece o aaricar resorce i he hos marke ecoomy, hich he iesor jdes cabe mos eeciey accessed ia FDI. Hisoricay, he ara resorce secorsere he mai orm o FDI i deeoi cories, eseciay he resorce-rich ecoomies. More rece arias icde FDI i research ad deeome(R&D)-iesie rms, as a meas o accessi rm-secic echooy adaes.

O aricar reeace o his aer, a sbse o hese os has beeexerieci roi romiece oer he as qarer cery o ha may be

ermed hird-ord MnEs. Teir emerece has brred he hisorica disiciobeee caia- ad echooy-exori rich ecoomies ad caia- adechooy-imori oor ecoomies. Te heomeo has hihihed herise o dyamic deeoi ecoomies ad rms ihi hem, ad he ariosayers i ieraioa echooy markes ad iormaio os. Te rise ohird-ord MnEs has aso shareed he aaysis o he comeiie adaaeso orei iesors. I he memorabe obseraio o wes (198), Tird ordmiaioas comee o oe hirice. Sdies o hird-ord MnEs haereeaed ha hese iesors comee o he basis o a rae o secic aribes.

Tese icde serior koede o a deeoi corys commercia adreaory eiromes, amiiariy ih more abor-iesie ad ess scae-iesie echooies, a reaer aeie or risk (or a eas a caaciy o oeraei eiromes ha are ess secre i a orma ea sese), ad deeer corykoede. Tese characerisics, ad he diereces ih deeoed coryiesors, ca i r be exaied by a rae o acors, icdi rasaciocoss ad rorieary koede. Ts, or exame, he reaer iiess ohird-ord MnEs o esabish joi ere oeraios reecs heir eakerbaraii oer, hich i r ress rom a ess oer echooica orbrad ame adaae. Teir reaer roesiy o oerae i he immediaeeihborhood is aso exaied by a simiar se o acors.

the aer o ooks a he reds ad aers o oard FDI ideeoi Eas Asia. tabe 1 shos he sock o oard FDI rom he reiosmai ecoomies. By 2007, Ho Ko, Chia had by ar he ares sock, some65 erce o he oa sock o $1,591.6 biio. As oed beo, a sbsaiahoh ko roorio o his oard FDI i reaiy oriiaes rom hepRC ad rers here. nex comes taiei,Chia ($158. biio) ad Siaore($19.5 biio), ooed by he pRC ($95.8 biio), Korea ($66.2 biio),Maaysia ($58.2 biio), ad he he oer-icome Soheas Asia ecoomies.

Ts, he or ey idsriaizi ecoomies, oeher ih he pRC ad

I is oabe ha, by ay o comariso, Idia is a sma oard iesor. See he aer byprema-chadra Ahkoraa i his isse o heAsian Development Review.


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Maaysia, accoed or 98 erce o he Eas Asia oa. Eas Asia aso darsa oher deeoi reios. Ee excdi he someha secia case o Ho

Ko, Chia, he Eas Asia oa exceeds ha o lai America.normaizi hese oos reaie o he sorce cory ross xed caia

ormaio (gFCF), Ho Ko, Chias oos are exraordiariy hih, hieSiaore is abo hree imes he deeoed ecoomies aerae sice 2000.taiei,Chia ad Maaysia are aso aroachi he aer re, hie a he oherecoomies are sma, e beo he deeoed ecoomies aerae. Exressed assock res, he Eas Asia ecoomies eeray rak oer, reeci he acha heir oard iesmes are o more rece iae.

tabe 1. Outward FDI Stock by Economy/Region, 19802007

1980 1990 1995 2000 2005 2006 2007

World 58.7 1,785. 2,91.2 6,18.2 10,597.7 12,756.1 15,602.

Developed economies 77.2 1,60. 2,607.5 5,265.1 9,16.2 10,88.0 1,02.2Eroea uio 21.0 810.5 1,22.7 ,050.6 5,77.7 6,57.5 8,086.1uied Saes 215. 0.5 699.0 1,16.2 2,21.7 2,5.7 2,791.Jaa 19.6 201. 28.5 278. 86.6 9.6 52.6

Developing economies 71.5 1.9 29. 861.8 1,299. 1,702. 2,288.1

Arica 7. 19.8 1.5 .2 52.5 66.8 72.8

Latin America andthe Caribbean

7.5 58.1 88.2 20.7 56.5 0.0 9.2

Developing Asia 16.6 66.9 209.5 612.7 890.0 1,205.1 1,721.7Eas Asia 1. 9.0 19. 509.6 67.1 927.7 1,8.9

Chia, peoesRebic o

0.0 .5 17.8 27.8 57.2 7. 95.8

Ho Ko, Chia 0.1 11.9 78.8 88. 71. 677.1 1,026.6Korea, Rebic o 0.1 2. 10.2 26.8 8.7 9.2 66.2taiei,Chia 1.0 0. 2.6 66.7 106.5 127.0 158.

Soheas Asia 1.2 9.5 50.1 8.5 162. 198. 22.7

Idoesia 0.0 0.1 5.9 6.9 1.9 16.6 21.Maaysia 0. 0.8 5.1 15.9 22.0 6.1 58.2phiiies 0.1 0. 1. 2.0 2.0 2.1 5.6Siaore 0.8 7.8 5.0 56.8 118. 17.2 19.5Taiad 0.0 0. 2. 2.2 5.1 5. 7.0

Soh Asia 0.1 0. 0.8 .1 12.0 18. 2.Idia 0.1 0.1 0.5 1.9 10.0 15.9 29.

FDI = orei direc iesme; tnC = rasaioa cororaio.Sorce: unCtAD, FDI/tnC daabase, dooaded Je 2009.

Daa i his ad he ooi o ararahs are o sho oi o sace cosrais,

b daa are aaiabe o reqes rom he ahors.


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Iard os o he reio, aai reaie o gFCF, sho ha seeraecoomies, eseciay Siaore ad taiei,Chia, are hihy oe o FDI. Te

raio or Maaysia is aso e aboe he deeoed ecoomies as a hoe, as arehose or vie nam sice he 1990s ad Taiad or some eriods. Te daaidicae ha he pRCs are ios reec riciay is size ad is ery hihiesme ees. Sice 2000, FDI ios i he pRC, reaie o gFCF, haebee beo he oba aerae. Korea, ike Jaa, has bee a ery sma reciie,exce i he immediae aermah o he Asia crisis i 19971998.

I is aso ossibe o comare merer ad acqisiio (M&A) rchases (i.e.,by domesic eiies abroad) ad oard FDI os.5 For he ord as a hoe,ad or he deeoed ecoomy ro, his raio caes arod a risi, o-

erm aerae o abo 0.9. For deeoi ecoomies, he re is aso risi, bis oer o aerae ad more oaie. nor does he raio aear o hae ooeda e-deed behaiora reaioshi dri he crisis eisodes. Oe exaaioor he oer deeoi ecoomy re is ha rms rom hese ecoomieseeray do o hae he acia isiios o deri sch aciiy, schas dee sock markes ad e-deeoed cororae bod markes. Te raio orEas Asia as a hoe is aso e beo he deeoed ecoomy aerae, ad idisays o cear red. Te oe cory or hich he raio is cosisey eaboe he reioa aerae is Siaore. Tis ikey reecs boh ha corys

e-deeoed acia markes ad is aciis oerme-iked cororaios,hich derake a o o M&A aciiy abroad.Fire 1 shos reds i oard ad iard FDI os or hese ecoomies.

Tree mai eares are obserabe. Firs, as oed, here is he eera icreasei FDI os, i boh direcios. Secod, hie mos cories coie o be eFDI reciies, oard FDI os hae eeray bee roi aser ha iardFDI. Tis reecs seera acors: he reei o caia accos, he reiosicreased acia ad echooica sohisicaio, is hih sais raes, adhe ac ha, cosise ih he FDI heories discssed aboe, seera ecoomiesare o amo he oba hih-icome ro, ad hereore more ikey o beoard iesors. Tird, here is o eera aer i hese os, i he seseo, or exame, a seadiy risi oard FDI/iard FDI raio associaed ihrisi er caia ross domesic rodc (gDp). I is hereore isrcie obriey examie he cory sories.

5noe ha here is o cear accoi reaioshi beee he o ariabes, siceoard FDI reers o ds ha cross ieraioa borders, hereas M&As may be ded rom

a ariey o domesic ad ieraioa sorces.


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Fire 1. Outward and Inward FDI Flows in East Asia, 19802007(Million $)

100,000

80,000

60,000

40,000

20,000

0

80,000

60,000

40,000

20,000

0

China, Peoples Rep. of Hong Kong, China

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

16,000

12,000

8,000

4,000

0

12,000

10,000

8,000

6,000

4,000

2,000

0

12,000

10,000

8,000

6,000

4,000

2,000

0

Korea, Rep. of Taipei,China

19

92

19

94

19

96

19

90

19

88

19

86

19

84

19

82

19

80

20

06

20

04

20

02

20

00

19

98

19

92

19

94

19

96

19

90

19

88

19

86

19

84

19

82

19

80

20

06

20

04

20

02

20

00

19

98

25,000

20,000

15,000

10,000

5,000

0

India10,000

8,0006,0004,0002,000

0-2,000-4,000-6,000

Indonesia

Malaysia

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

Inward FDI Outward FDI

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

Philippines4,0003,5003,0002,5002,0001,5001,000

5000

-500

Continued


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Fire 1Continued

30,000

25,000

20,000

15,000

10,000

5,000

0

Singapore

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2004

2002

2000

1998

8,0007,0006,0005,0004,0003,0002,0001,000

0

Viet Nam

1

992

1

994

1

996

1

990

1

988

1

986

1

984

1

982

1

980

2

006

2

004

2

002

2

000

1

998

12,000

10,000

8,000

6,000

2,000

0

ailand

1992

1994

1996

1990

1988

1986

1984

1982

1980

2006

2008

2004

2002

2000

1998

Inward FDI Outward FDI

FDI = orei direc iesme; tnC = rasaioa cororaio.Sorces: unCtAD, FDI/tnC daabase, dooaded Je 2009; daa or Taiad i 2008 is rom he Bak

o Taiad, aaiabe .bo.or.h, dooaded Je 2009.

pRC: Iard FDI os bea o ro exremey qicky rom he eary1990s. Tey he died i he ae 1990s, as a res o he Asia ecoomiccrisis, b sred aai aer 2000 he, or a eriod, he pRC as he ords

ares reciie o FDI. Oard FDI as iiiay ery sma by comariso,b i bea o icrease ery raidy rom arod 2002, ad aa oos areo amos oe qarer o ios.

Sae-oed eerrises (SOEs) are he major orei iesors, accoior 8 erce o he oard sock by ed-2005. Hoeer, his re is hoho be a oeresimae becase riae secor oard FDI is ess ikey o secreocia ermissio o o abroad, ad i ay case he SOE share has coiedo decie i rece years. Mos o he pRCs FDI oes o Asia, abo 67 erceo he sock by ed-2007, ih Ho Ko, Chia aoe absorbi 58 erceo he oa. Te 21 erce share reored as oi o lai America is maiyexaied by he 20 erce oi o he o ax haes, Cayma Isads adBriish viri Isads (BvI). geie FDI hereore has o excde hese osas e as mch o he iesme i Ho Ko, Chia o ake adaae o


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iceies oe oy o orei iesors.6 Ee aoi or hese oersaemes,he pRCs iesme is si redomiay i deeoi ecoomies, cosise

ih he eary sae exeriece o deeoi cory iesors.As oed, he pRCs orei exchae reseres o exceed $2 riio. A

sma roorio o his is iesed abroad i he orm o SwFs, aricary iara resorces. Tere is some ariess oard he oerseas iesme aciiieso he pRCs SOEs. Someimes his ariess coceas sraihorard commerciaroecioism. For exame, he aem by he Chia naioa Oshore OiCororaio o rchase uoca i 2005 as bocked, as as Haeis aem oby he uied Saes (uS) echooy rm Com i 2008. Ideed, peroChiasacqisiio o Siaore peroem i May 2009 as see as a ooriy o

deoy he aer as a ess hreaei beachhead or hird-cory acqisiios.to aay sch ears, rms rom he pRC hae adoed a sraey o mioriy joiere arershis i some o heir acqisiios.

taiei,Chia: Sice he mid-1980s, oard os hae exceeded ios,oe by a siica mari. Tere as a ery are icrease i oos rom hemid-1980s, he rs major ae o oard iesmes, as mch o he corysabor-iesie maacri base as moed oshore. Boh os coraceddri he Asia ecoomic crisis, b hey recoered qicky, ahoh iardFDI e shary i 2002005, i ar oi o oiica ceraiy.

Te eary oshore iesmes rom taiei,Chia ere heaiy ieced byhe oerme, maiy hroh SOEs ad oe ih diomaic cosideraios imid. Hoeer, rom he 1980s, commercia cosideraios hae bee domiaad mos o he FDI has bee riae secor-drie. For mch o he as odecades, he oerme has bee ary o oo cose a eaeme ih he pRC,ahoh i he as year his cocer has bee siicay reaxed. Dri he1990s, he oerme isied a go Soh camai, exhori rms o iesi Soheas Asia, ih reerece ie oer he pRC (Che 1998). Hoeer,rom he eary 1990s, os o he pRC hae exceeded hose o Soheas Asia bya icreasiy are mari. Oer ime, rms rom taiei,Chia are ikey obecome eer more deey ieraed ih he maiad. A eas 5 erce o isoaio is esimaed o ie here. A major imes came i March 2008 ihhe e oerme i he ecoomy, ad more cordia reaios.7

6Ta is, a sbsaia roorio (hoh o be as mch as 20 erce a is eak) o he

pRCs oard FDI oer he as 20 years has ake he orm o recyci, ha is, he pRCsrms moi ds oshore, riciay o Ho Ko, Chia, or reiesme back io hepRC der he ise o FDI, o ake adaae o secia ax ad rade iceies aaiabe oy

o orei iesors (naho 2007). As reorm has roceeded, he da oicy reime roidiaorabe reame o orei iesors has bee raday dismaed, ad hese os hae

decied. I eary 2008, hese iceies ere aboished aoeher, ad hereore he rod-rii FDI i disaear, resi aso i a decii share or Ho Ko, Chia.

7As a idicaio o he raidy roi direc commercia ies, rear direc ihsresmed aer a absece o more ha ha a cery. Te mber rose dramaicay, rom 6 er

eek iiiay o 270 er eek by Ari 2009.


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Ho Ko, Chia: Reeci is ieraioa orieaio, ad hedomiace o he pRC, ios ad oos hae moed cosey oeher. Te

o series rose areciaby dri he 1990s, ih he ecoomys rer o hepRC ad he ose o he Asia ecoomic crisis, boh i 1997, hai ie eec.Boh series e shary i he eary ar o his decade beore reri o herecord ees reisered a he r o he cery. Te sock o Ho Ko, Chiasiard FDI ad oard FDI rose siicay rom he mid-2000s. I he caseo oard FDI, mch o he icreased ros o Ho Ko, Chias oeraiosabroad ere o reariaed back o are comaies i Ho Ko, Chia adhs ook he orm o oard FDI. Te shar areciaio i he marke aeo oerseas-oed comaies aso coribed o he icrease.

Ho Ko, Chias Cess ad Saisics Dearme reors ha as oed-2007, he socks o iard FDI ad oard FDI ere HK$9,187 biioad HK$7,889 biio, reseciey. Tese corresoded o 568 erce ad 88erce o gDp i ha year. Te BvI absorbed 8 erce o he oa, reeciis sas as a o-ax ieraioa acia ceer, ad as a base or oard(ad ko) desiaios. Te pRC as by ar he ares cory reciie,ih erce o he sock, ooed by he uied Kidom ad Siaore.gado proice aoe accoed or 26 erce o he sock. I as arerha ay sie desiaio oher ha he BvI, reeci he dee ecoomic ies

beee he o reios. I is reasoabe o assme ha he rea ecoomy adreio shares i a cases ere hiher, sice some o he BvI ds od haeassed o o hese a desiaios.

Rebic o Korea: Boh iard ad oard FDI os ere modes ihe ae 1980s, reeci he corys resricie FDI reime ad is caiacoros. Boh series bea o icrease sbsaiay i he 1990s, ih oosexceedi ios. Tis occrred as abor-iesie aciiies moed oshore, adhe chaebo bea o qicky ieraioaize heir oeraios. Boh series hee dri he 19971998 Asia crisis, ad ios exceeded oos. Te aeroccrred becase he more ibera FDI reime (i ar orced o he cory byhe Ieraioa Moeary Fd) araced re-sae FDI, hie he oerseasoeraios o he chaebo ere craied by heir acia imiaios. OardFDI he bea o icrease qicky, ad o aai exceed ios.

no cory has bee more imora i Korea FDI ha he pRC. Isiesmes re raidy oce diomaic reaios ere ormaized i 1992,ad he pRC o absorbs more ha ha o Koreas sock o oard FDI. Isiesme aers i he pRC aso dier rom hose o oher major oreiiesors (Ka ad lee 2007). Abo 60 erce o is iesmes hae beei he roximae orheas reios. Te iesmes aso aear o be maiy

marke-seeki i are, as idicaed by he imorace o marke size as aexaaory ariabe i iesors decisios, as comared o ae ees.


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Idoesia: Tis cory has reisered he mos oaie FDI os. Iardos ere icreasi sroy rior o he Asia crisis i 19971998; hey

he e shary, ad remaied eaie i 200. Oard FDI has eeraybee mch smaer, exce or he years immediaey beore he crisis ad morerecey. Mch o he oard FDI is hoh o be iesme by he corysehic commiy rom he pRC, ho domiae mch o he corys moderbsiess secor, ad hose oiica erabiiy eads hem o diersiy heirasse hodis abroad, ih Siaore as a aored desiaio.

Maaysia: Tis corys os reec a more yica deeoi coryaer, ih iard FDI exceedi oos by a are mari i recey. Bohseries ere risi sroy dri he 1990s, e shary dri he 19971998

Asia crisis, ad e aai dri he eecroics dor i 20012002. Teyhae sice ro sroy o record ees i 2007 he, or he rs ime, oardos exceeded ios.

wih he sa caeas coceri daa qaiy, Tam (2005) obsered hahisoricay Siaore i aricar ad Associaio o Soheas Asia naiosmembers i eera hae bee he ricia desiaio o Maaysia oardFDI. Asraia; pRC; Ho Ko, Chia; ad uS hae aso receied siicaos. Tere hae aso bee some iesmes i Arica, oe ih a oiicaaor. Tere is o cear aer o secora seciaizaio. As he ares Maaysia

comay abroad, he aciiies o he sae-oed peroas iece he areaeaers, resi i sbsaia iesmes i exoraio ad exracio i heoi ad as idsry. Oher oerme-iked comaies hae iesed abroad,icdi teekom Maaysia. More recey, i resose o hih ieraioarices ad oss o comaraie adaae, Maaysia has bee a major iesor ihe Idoesia am oi idsry.

phiiies: Oard iesme has aays bee eiibe, i coras ois ery are hma caia os. Hisoricay, iard FDI as qie sma, b iacceeraed i he 1990s as eecie ecoomic oicy reorms ere imemeed.Te decie i 1998 as modes as he cory maaed o aoid a serioscoracio. Te dis sice 2000 hae bee mosy associaed ih oiicaceraiy.

Siaore: like Ho Ko, Chia, Siaore has aays beeambiosy oe o FDI, ad ios ad oos hae eeray moedcosey oeher. Boh icreased rom he ae 1980s, e shary i 19971998,ih Siaores sro exosre o oher crisis-aeced iesmes maiyihe dor, he recoered, aar rom aoher di dri he eecroicscoracio earier his decade. Sice 2005, iard FDI os hae bee a recordees, hie oard FDI has bee sro. I sie o is exraordiariy hih

sais rae, iard os hae amos aays exceeded oos.Seera acors hae shaed oard FDI os ad aers rom Siaore.

Tese icde is ery hih sais raes, is ersise crre acco ad


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sca srses, he cocered oard drie by he goerme o SiaoreIesme Cororaio ad temasek,8 ad he ac ha are mbers o

MnEs hae adoed Siaore as heir reioa headqarers ad aorm oriesme i he eihborhood.

Taiad: Iard FDI re sroy dri he 1990s, ad remaied a hihees dri he 19971998 crisis, oi o coied oeess ad araciebyi ooriies. Aer decii i he eary 2000s, ios hae becomesro aai, aarey deerred by oiica ceraiy, a eas i 2008.Oard FDI re modesy rior o he crisis, ad has icreased aai i receyears, b i remais mch smaer ha iard os.

As oed, a ieresi eare o he Asia acia crisis i Taiad as

he corasi behaior o iard ad oard FDI os. Iard FDI osrose shary, rom $2. biio i 1996 o $7. biio i 1998. Tis as maiyre-sae FDI, ha is, M&As araced by he reay cheaeed asse rices asa res o he crisis. Hoeer, oard FDI e shary. Te mai reaso or hecoracio as ha seera o he re-crisis oard orays had acked srooershi adaaes, ad raher had ro o he basis o ready access o acead iaed asse aes a home. Te hih deb ees o he iesor comaies,comoded by he dereciaio o he Tai bah, orced a major resrcriad ocs o heir core aciiies, maiy a home.

Reri o he eera Eas Asia sory, i is imora o emhasize heraidy chai dyamics o hese driers o oard FDI, as a res o asecoomic roh, chai comaraie adaae, ad major iesmes ihma caia ad R&D. Tis aies aricary o he pRC ad Idia, ocories disiished o oy by heir size ad roh, b aso by heir hihees o R&D iesiy (as measred by R&D exedire as a erceae ogDp). Te earier emhasis o heay idsry i boh cories, hie cosy,did beqeah ockes o adaced idsria comeece. Ad o heir eadicomaies hae he acia caaciy o derake reerse-eieeri FDIas a meas o qicky moi he echooy adder. Te raidy icreasiR&D exedire is aricary oiceabe i he comi, eecroics, adeecommicaios eqime idsries (Economist2009). Te uS accos oroe hird o oba R&D, b i he pRC, R&D exedire re by 2 erceoer he eriod 20012006, ad is cororae R&D exedire is o simiaro he Eroea ee. Firms rom Korea hae aso coied o raidy deeoheir R&D caaciy. Koreas iormaio ad commicaio echooy rmssed abo 6.5 erce o saes o R&D, comared o he Eroea ad Jaaeseres o 5 erce ad 8 erce, reseciey. Is eadi comay, Sams,has oerake IBM i is exedires, ad o raks secod i he idsry or

aes issed by he uS pae ad trademark Oce.

8temasek is he oermes iesme arm ih is hodi comaies, ko as

oerme-iked comaies.


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A Boso Cosi gro reor (smmarized i Economist 2008)oered he ooi syhesis o he comeiie adaaes o hese icreasiy

sohisicaed hird-ord MnEs. Te rs is aki brads rom he oca o heoba marke, bidi o ecie, o-cos domesic oeraios. Examesicde pRC aiace maacrer Hisese ad Bajaj Ao, he Idia rodcero o- ad hree-heeed ehices. Reaed o his, he secod comeiieadaae o hird-ord MnEs is ioai o he basis o oca eieeriexceece, ih Embraer, he Braziia reioa aircra maacrer, as aexame. Te hird is deeoi oba eadershi i a arro rodc caeory,aso o he basis o exceece a home, combied someimes ih sraeicieraioa acqisiios o echooy. Exames icde BYD Ao, he pRCs

baery maker, ad Johso Eecric, Ho Ko, Chias rodcer o iy eecricmoors or cars ad oher eqime. A orh comeiie adaae ioesbidi o echooica comeece i a ara resorce base a home, hich ishe ake abroad, as i Brazis rai ad mea rodcers ad is iro ore miicomay, vae. A a caeory o comeiie adaae reers o he deeomeo a e or beer bsiess mode, e.., Mexicos Cemex, a major sier o readymix ceme ha oeraes i may cories (Economist2008).

As a coseqece o his risi echooica comeece, deeoedcory MnEs are adjsi heir sraeies i each cory, iei hem o

js as ecie rodcio ocaios or roie oods ad serices b oicreasiy as ecie mid-ee R&D ceers.9 I 2001, here ere abo 100MnE R&D ceers i each cory. By he ed o 2008, his had ro o arod1,100 i he pRC (reresei 920 MnEs) ad 780 i Idia (reresei 670MnEs). Tere has bee a cocomia rise i domesicay oed oeraiosad sioers beee orei ad oca ayers. A major aracio i bohcories is he are exisi o-cos ieeca irasrcre, ieraci iha sizeabe diasora, eseciay i he case o Idia. Reeci he eary sae o hisrocess, hese R&D aciiies are coceraed boh by secor (iormaio adcommicaios echooy is by ar he ares, ooed by he heah secor)ad eorahy (Beiji ad Shahai i he pRC ad Baaore ad he naioaCaia Reio i Idia). Tis rocess is ikey o acceerae as he hma caiabases i boh cories exad raidy. Moreoer, MnEs rom boh cories,sch as pRCs Haei ad Idias taa, hae acqired or esabished R&D ceersi he uS ad Eroe as a meas o ai io adaced koede adechooy csers.

9See Brche (2009), o hich his ararah dras.


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III. OUTWARD FDI AND FINANCIAL CRISES

Te oba acia crisis has resed i decii oba FDI os. Accordio unCtAD (2009), he mos ahoriaie reor o dae, aer oba FDIos reached a hisoric record o $1.9 riio i 2007, hey are esimaed ohae decied by 15 erce i 2008, ad a rher decie is amos cerai i2009. Te decie has bee cased by o mai acors. Firs, oba ecoomicroh has decied shary, aricary i he Oraisaio or EcoomicCo-oeraio ad Deeome (OECD) bock. Coseqey, here are eeriesme ooriies ad rms hae adoed more caios iesmesraeies. Secod, i has become more dic o access ace, oi o

idesread dicies i he oba acia secor, icdi he ooriyo raise ds hroh iiia bic oeris (IpOs) ad cororae bod isses,ad he shar a i oba eqiy rices. Te crisis has aricary aeced M&Aaciiy, resi i exesie diesmes ad resrcri, eseciay or heaiyidebed comaies oerai i coraci secors (e.., acia serices, reaesae, bidi maerias, ad cosmer drabes).

I Eas Asia, here are simiariies ad diereces beee he crrerecessio ad he 19971998 Asia crisis. Firs, he oba ecoomy (gDp,rade, ad iesme) is o coraci hereas i 19971998 i as boya.

Secod, hereas seera deeoi Eas Asia ecoomies exerieced sharecoomic coracios de o he Asia crisis, Eas Asiaed by he pRCiseaheri he crre crisis beer ha mos oher reios o he ord.Tis is so oihsadi eaie roh i he oe ecoomies o Korea;Maaysia; Siaore; taiei,Chia; ad Taiad. Tird, ike he aciacoase i seera ecoomies i 19971998, ad i sie o he wess aciaroecioism, Eas Asias acia secors hae eeray remaied iac i hecrre crisis, sored by sro domesic sais ad imied exosre o heimodi acia secors i he uS ad Eroe. Forh, rade ad iesmereimes hae eeray remaied oe i he crre crisis i sie o he risiide o ecoomic aioaism ad ecoomic isecriy.

preimiary esimaes or 2008 idicae ha, hereas oard FDI romdeeoed ecoomies decied by 11.9 erce, oard FDI rom deeoiecoomies rose by 2.0 erce. Eas Asia coied o be he major sorce o heaer, accoi or o hirds o he oa. Te coras is sarker si i he caseo cross-border M&A rchases. Tese decied by 1.9 erce i deeoedecoomies, b oy shrak by 9.1 erce i deeoi ecoomies. Siicay,M&A aciiy acay rose i deeoi Eas Asia by 16.1 erce.

Ts, he imac o FDI os across reios (ad secors) has bee ee.

As unCtAD (2009) obsered, FDI os o deeoi reios coied oicrease, abei a a soer rae. Tis red is ikey o coie io 2009.Te icre is ess cear i he case o oard FDI. whie i i corac i


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areae, he reay cheaeed asse rices aso roide byi ooriies orcomaies (ad cories) ih sro baace shees. More eeray, cash-sh

SwFs, mos o hich are ocaed i deeoi cories, hae icreased heirFDI aciiies. For exame, ih is orei exchae reseres o exceedi$2 riio ad is acia secor arey iac, he pRC has emered as a majorayer. SwFs M&A aciiies icreased by 50 erce i 2008 o $15 biio. Ashe oba acia crisis deeoed i 2007, seera o hese ds areed heacia serices idsry, here eqiy rices had ae shary.10 I mos cases,hoeer, hese acqisiios icrred heay osses, a eas i he shor erm. Tedecie i commodiy rices rom ae 2008, i resose o he oba ecoomiccrisis ad he raid icrease i mii rodcio i rece years riered by

hih rices, has aso creaed byi ooriies, aricary amo heaiyidebed comaies.

Ho hae hese caia os behaed oer he as o decades? Teaayics ad emirica reaiies are cear i he case o iard FDI adieraioa acia crises. FDI is drie maiy by o-erm seimesabo he reciie cories ad i aso eais iesme i hysica as adeqime.11 Hece, i he ake o a ieraioa acia crisis, FDI iosare ikey o be more resiie ha oher orms o caia io, ha is, oroioiesme (boh eqiy ad deb secriies), bak edi, ad oher reaed

orms o orei caia. As lisey (2001) demosraed, MnEs ca resodeeciey o a domesic demad coase ad domesic credi coracio idcedby a acia crisis. Sice MnEs hae rm-secic adaaes i he orm okoede-based asses sch as rorieary iormaio reai o rodcio,echooy, ad maaeria ko-ho, ad serior access o orei markesas comared o domesicay oed rms, hey ca sich markes more qicky.Tey aso eeray hae beer access o ieraioa caia markes, icdisor rom headqarers.

Dri he 19971998 Asia acia crisis, he osiie imacs oroiabiiy o MnEs oeraio i he crisis-aeced cories eerayoeihed he eaie imacs. Ahkoraa (200) oied o ha crrecycoase had a osiie imac o FDI i hree ays. Firs, he domesicrodcio coss o orei rms ere redced as a res o he are exchaerae dereciaio, hece, ih oher his eqa, maki he crisis-aecedcories a more aracie sie or exor-orieed iesme. Secod, ai

10M&A aciiy i his secor by SwFs oriiai rom Eas Asia icdes he Chia

Iesme Cororaio rchase o a sake i Mora Saey, he Korea IesmeCororaio rchase o Merri lych, ad Siaores rchases o uBS ad Merri lych (byhe goerme o Siaore Iesme Cororaio ad temasek, reseciey).

11noe ha here are o mai comoes o FDI, amey reeed iesme adM&A. Te ormer ioes iesme i hysica as ad eqime hie he aer orksmosy hroh eqiy markes. I Eas Asia, reeed iesme is si a crcia comoe o

FDI, ahoh M&A has icreased coiosy, eseciay aer he 1997 Asia acia crisis.


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o asse rices oered aracie byi ooriies. Tird, hese ai asserices ere eeray accomaied by a more ibera FDI reime, ecorai

re-sae M&As.12 I ac, oa aroed aerae aa M&A i he e EasAsia crisis cories recorded a 120-erce icrease beee 19901996 ad19972001, rom $.5 biio o $1.1 riio.

Tere hae bee e sdies o he behaior o oard FDI dri he19971998 Asia acia crisis, comared o he sbsaia ierare o iardFDI. Tere is some eidece o a sodo o oard FDI. Oi o he areo his crisis, oriiai i seera Asia deeoi cories, he domesicdemad coase ad acia imosio redced he sy o iesme dsaaiabe or oard FDI.

I coras o he 19971998 crisis, he crre acia crisis oriiaedi he deeoed cories ad has cased a rooced sodo i he obaecoomy. Tere are o key chaes hroh hich his recessio has beerasmied o deeoi Asia, amey rade ad ace (James e a. 2008). Soar, he imacs o deeoi Asia hae bee e rimariy hroh he radechae raher ha hroh he acia isiios. By he orh qarer o2008, deeoi Asias exors had coraced shary. Te dro o exor rohaeraed eary 0 erce i Eas ad Soheas Asia ad aroached dobediis i Soh Asia.

Oi o hese diereces, he imacs o he crre crisis o FDI areikey o dier rom hose o he reios crisis. For iard FDI, he credicrch riered by he acia crisis may hae redced he sorces o oreiiesme ds, maiy rom deeoed cories, so ha he ome o iardFDI o deeoi Asia is ikey o decie. Hoeer, he ac ha seera majorAsia ecoomies hae bee reaiey resiie dri he crisis may ehaceheir aracieess o FDI. So ar, he shares eaie imac o iard FDIhas bee i he deeoed cories. Moreoer, deeoi Asias reaieyresiie acia markes, combied ih decii asse aes i deeoedcories, may creae byi ooriies or deeoi cory iesors.Hoeer, deeoi cory iesors arey ack he reqisie maaemeskis, bsiess acme, ad koede o deeoed cory ea sysems adreaory eiromes o ake adaae o hese ooriies.

Te aa daa reseed aboe roide a icre o oer erm redsad aers. Hoeer, hey cocea cosiderabe oaiiy dri crisis eriods.to obai a cearer icre o he behaior o FDI dri sch eriods, daa or

12Te crre oba acia crisis has aso irodced a addiioa moiaio orcories o iberaize ay remaii resricios o oard FDI, amey he cocer ha he

dereciai uS doar i ace ard ressre o heir o exchae raes, ad hece ocomeiieess. goermes o see icreased oard FDI as a meas o miiai crrecyareciaio ressres. Tis cosideraio as aricaed, or exame, by he goeror o he

Cera Bak o Taiad i eary As 2009.


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shorer eriods are reqired. For some acia daa series, a he eak o a crisis,eeky or ee daiy daa are imiai. Hoeer, FDI rojecs are my ad

hereore sch hih-reqecy daa od be miseadi. Te ahors hereoresed qarery daa, hich are aaiabe i he unCtAD World Investment Reportdaabase, he Ieraioa Moeary Fds International Financial Statisticsdaabase, ad cera baks. Tese are reseed i Fire 2 or each o he maideeoi Eas Asia ecoomies or o sberiods, 19971998 ad 20082009,he aer i he secod qarer here daa ermi. Boh FDI ad oroiodaa are sho or comariso.

I he case o he 19971998 Asia crisis, he daa amiy he icredeiced aboe, b ih a cearer idicaio o he oaiiy ad ri ois

i he series. Ta is, he decie i oroio iesme, eeray rom areosiie o are eaie mbers, is eide hroh he corse o 1997, ihhe hird qarer eeray exhibii he shares chae, eseciay i he orcrisis-aeced ecoomies. Tereaer, oroio iesme rered o he reioqicky, eseciay i ecoomies ike taiei,Chia ha ere o seerey aeced.Te dieri aers o FDI oed aboe are aso eide rom ae 1997 adcoie io 1998.

I 20082009, he icre is someha diere. I mos ecoomies,oroio iesme bea o decie i he secod ad hird qarers o 2008,

ad ahered ace hroho he year. Hoeer, mos cases did o sho exremeoaiiy ike ha exhibied i 19971998, ad oroio iesors eeraybea o rer i 2009. Boh iard ad oard FDI died or eriods i2008, b he chaes ere o rooced. FDI ios shoed a coiidoard moeme or mos ecoomies hroh he secod qarer o 2009,exce or taiei,Chia; Korea; ad Siaore, here he ios rose sihy oerhe rs qarer res. Tese reds resmaby reec he coii eecso he oba crisis o he major g (Eroea uio, Jaa, ad uS) sorceecoomies, ad heir si raie baki secors. Te ocome diers rom hao he 19971998 crisis, he FDI ios ere sro i mos ecoomies. Bycoras, FDI oos rom hese ecoomies eeray bea o ick i hesecod qarer o 2009, ih he exceio o Korea. Te reios resiiece adeary rer o oimism exai his recoery, deried by he coiisreh o he pRCs ecoomy ad he absece o seere acia sress.


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Fire 2. Quarterly FDI and Portolio Flows in Two Crisis Episodes

50,000

40,000

30,000

20,000

10,000

0

-10,000

-20,000

25,00020,00015,00010,000

5,0000

-5,000-10,000-15,000

China, Peoples Rep. of

Korea, Rep. of

Hong Kong, China

8,000

6,000

4,000

2,000

0

-2,000

-4,000

6,0005,0004,0003,0002,0001,000

0

-1,000-2,000-3,000

4,000

2,000

0

-2,000

-4,000

-6,000

Taipei,China

1,500

1,000

500

0

-500

-1,000

Malaysia Indonesia

1996

FDI outows (199699)Portfolio outows (199699)FDI inows (199699)Portfolio inows (199699)

1997 1998 1999

1996Q1

1997Q1

Q3 Q3 1998Q1

Q3 1999Q1

Q3 1996Q1

1997Q1

Q3 Q3 1998Q1

Q3 1999Q1

Q3

1999Q1 Q2 Q3 Q4


1996Q1

1997Q1

Q3 Q3 1998Q1

Q3 1999Q1

Q3

FDI outows (199697)FDI inows (199699)Portfolio inows (199699)



1999Q1 Q2 Q3 Q4

FDI outows (1999)Portfolio outows (1999)FDI inows (1999)

Portfolio inows (1999)

(a) 19971999

Continued


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Fire 2Continued

10,0008,0006,0004,0002,000

0-2,000-4,000-6,000-8,000

3,0002,5002,0001,5001,000

5000

-500-1,000

Singapore ailand

200,000

150,000

100,000

50,000

0

-50,000

-100,000

50,00040,00030,00020,00010,000

0-10,000-20,000-30,000-40,000-50,000

15,000

10,000

5,000

0

-5,000

-10,000

-15,000

-20,000

20,000

15,00010,0005,000

0-5,000

-10,000-15,000-20,000

FDI outows (199699)

Portfolio outows (199699)FDI inows (199699)Portfolio inows (199699)

FDI outows (199699)


2007H1

2008H1

H2 H2

1996Q1

1997Q1

Q3 Q3 1998Q1

Q3 1999Q1

Q3 1996Q1

1997Q1

Q3 Q3 1998Q1

Q3 1999Q1

Q3





China, Peoples Rep. of(b) 20072009

Korea, Rep. of

Hong Kong, China

Taipei,China

2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2

2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2 2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2

Continued


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Fire 2Continued

8,0006,0004,0002,000

0-2,000-4,000-6,000-8,000

8,0006,000

4,000

2,000

0

-2,000

-4,000

-6,000

Malaysia Indonesia

15,000

10,000

5,000

0

-5,000

-10,000

-15,000

4,000

2,000

0

-2,000

-4,000

-6,000

FDI outows (200708)


FDI outows (200709)




Singapore ailand

2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q22007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2

2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2 2007Q1

Q3 Q3 Q4Q2 Q42008Q1

Q2 2009Q1

Q2

FDI = orei direc iesme.Sorces: unCtAD, word Iesme Reor daabase, aaiabe h://.cad.or/temaes/pae.

as?iIemID=192&a=1; Ieraioa Moeary Fd, International Financial Statisticsdaabase, aaiabe h://.imsaisics.or/im/imfroser.asx?brach=ROOt;cera baks.

Ts he eera resmio i he ierare is ha FDI os are essoaie ha oher orms o riae caia os, dri boh orma imes adcrisis eisodes. Tis is ared o be oe o he bees o FDI, ha is, is reaerdrabiiy as a coseqece o he oer ime horizo emoyed by his cass oiesors. I is aso maiaied ha FDI hereore oses eer macroecoomicmaaeme chaees, eseciay or exchae rae oicy ad he aciasecor. the eidece or he Eas Asia ecoomies is examied beo bycacai oaiiy idices (i.e., coecies o ariaio) or hree eriodso, dri, ad aer he 19971998 Asia crisisor FDI ad oroio caia,ad or ios ad oos. Te ress are reseed i tabe 2.


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tabe 2. Volatility o FDI (Inward and Outward) and Other Forms

o Capital Flows, 19902008

Infows FDI Portolio

Pre-crisis

Crisis Post-crisis

Pre-crisis

Crisis Post-crisis

Chia, peoesRe. o

0.70 0.07 0.50 0.99 1.18 0.9

Ho Ko, Chia 0.7 0.5 0.97 1.98Korea, Re. o 0.55 0.58 0.61 0.77 0.68 0.52Idoesia 0.68 5. 1.95 1.07 .95 1.08Maaysia 0.2 0.0 0.57 1.00 1.2 2.16

phiiies 0.56 0.1 0.67 1. 1.27 1.0Siaore 0.9 0.2 0.6 1.6 2.21 0.92Taiad 0.18 0. 0.9 0.91 1.9 1.

Outfows FDI Portolio

Pre-crisis

Crisis Post-crisis

Pre-crisis

Crisis Post-crisis

Chia, peoesRe. o

0.60 0.5 1.0 0.66 0.95 1.7

Ho Ko, Chia 0.75 0.60 .89 0.2

Korea, Re. o 0.61 0.07 0.7 1.26 2.9 1.18Idoesia 0.98 1.67 0.92 1.52Maaysia 1.62 1.8 1.0 1.01phiiies 0.1 0.16 2.01 1. 1.27 1.0Siaore 0.79 0.6 0.6 1.6 2.21 0.92Taiad 0.82 0.96 1.1 1.88 1.50 1.86

idicaes daa as aaiabe or o aicabe.FDI = orei direc iesme.noes: voaiiy is measred by coecie o ariaio, hich is sadard deiaio diided by mea.

pre-crisis reers o re-1997 ad os-crisis reers o 20002007, exce or Ho Ko, Chia adIdoesia, or hich he daa are exeded o 2008.

Sorces: Ieraioa Moeary Fd, International Financial Statistics daabase, dooaded Je 2009,aaiabe h://.imsaisics.or/im/imfroser.asx?brach=ROOt; ahors esimaes.

For ios, he eidece is cear. FDI os are more sabe, siicayso i he majoriy o cases. Ieresiy, he reaie orders o maide do ochae sbsaiay oer ime, ha is, re- ad os-crisis. Moreoer, he hoscory oicy reimes, i aricar heher or o here are caia coros, doo aear o be a major acor. Tis is ceraiy he case or Taiad, Siaore,phiiies, Maaysia (oihsadi is shor-erm caia coros irodcedi Seember 1998), ad pRC. Hoeer, oe cear dierece is he behaior o

he o series dri he 19971998 Asia crisis. Te oaiiy o oroio osicreased or mos o he cories, hereas here as o cear red or FDI imos cories. Tis is cosise ih he yica behaior o he o orms o


26/166


iesme: oroio iesme is mch more ikey o ado herd-ike behaiorad disay a boom ad bs aer, hereas FDI is say more sabe. I ac,

corary o he reds i oroio iesme, i may acay icrease dria crisis.

I sie o he oba icrease i caia os, here are o cear reds oerime or he reio as a hoe. For exame, i Siaore, he eera red hasbee decii oaiiy i boh series, hie Maaysia ad Taiad hae shoa risi red. Tis is a imora obseraio ie he someimes hysericariis i he oar ress coceri he aeed daers o a oe caiaacco.

Te ricia exceio o hese obseraios is Idoesia. pre-crisis,

is oaiiy idices ere abo a he reioa aerae. Hoeer, boh rosedramaicay dri he crisis. Ieresiy, he oaiiy o is oroio oshas rered o ha o he re-crisis eriod, hereas FDI has remaied oaie,a amos hree imes ha o he re-crisis eriod. Idoesia has diered oro reasos.1 Firs, ad mos imora, is crisis as he deees i he reio;i as he oy oe o exeriece a broad-rai ecoomic ad isiioacoase. Te crisis riered he ed o he 2-year Sharo reime i May 1998,ad resed i a exeded eriod o oiica isabiiy. Coseqey, oreiiesors o a yes aoided he cory; FDI os ere eaie rom 1998

i 200. A secod exaaio is ha, de o Idoesias abda resorces, ahiher roorio o is FDI oes o he mii secor, hich is iherey moreoaie oi o cai commodiy rices.

Te icre ih resec o oos is broady simiar. Te oaiiy isicreasi or some cories (pRC, Korea, Siaore, ad Taiad) b o ao hem, ad he icreases are modes i mos cases. Becase he oos ereeeray sma beore he crisis, he daa eed o be ierreed carey. Tereas o cear red i oard FDI oaiiy dri he crisis, hereas oroiooos icreased i mos cories. Te oe case here oroio oaiiy asoer as Maaysia, ad his resmaby reecs he eecs o is coroersiab arey sccess resricios o shor-erm caia mobiiy.

IV. CONCLUSION

Te aers mai cocsios are as oos: Firs, as ar o he eera rocesso oba ad reioa ieraio, oard FDI rom deeoi Eas Asia hasbee roi raidy. Ahoh i mos cases i is smaer ha iard FDI, irece years i has bee roi more raidy i seera ecoomies. Te Eas Asia

exeriece demosraes he roi imorace o hird-ord miaioas

1See Asicahyoo, Bird, ad Hi (2009) ad Ramseer ad Sjohom (2006) or rher

discssio.


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ad dises he beie ha oy rms rom hih-icome ecoomies i iesabroad.

Secod, a rae o moies ad driers exais hese aers. Tese icdeexceioay hih sais raes i some ecoomies, roi echooicasohisicaio, ad ieraio ihi broader reioa byi ad rodcioeorks. lo barriers o cross-border rasacios, aciiaed by iaerarade ad iesme iberaizaio, eorahic roximiy, ad ehic amiiariyhae sreheed he eecs o hese driers. I is imora o emhasize hahie oicy iiiaies hae ayed a roe, he major deermias hae beeecoomic. Tis cocsio aies aso o he oard FDI o sae-oed oroerme-iked cororaios rom cories sch as he pRC ad Siaore.

A he eidece sess ha he decisios o hese rms are moiaed rimariyby a commercia cacs.

Tird, i is o ye cear ho ad o ha exe he oba acia crisis iaec oard FDI rom he reio. Oard FDI is ikey o decie, cosiseih oba aers ad drie by decii oba o ad acia raiiy.Hoeer, crises deae asse rices, someimes siicay, ad hereore creaebyi ooriies or resorce-sh iesors. Te pRC i aricar is eaced i his resec, ih coii sro ecoomic roh, a acia secorha remais iac (hoh ih some dobs coceri is rdeia ad

serisory caaciy), ad he ieraioa reseres.

REFERENCES

Asicahyoo, H., K. Bird, ad H. Hi. 2009. Maki Ecoomic poicy i weak,Democraic, pos-crisis Saes: A Idoesia Case Sdy. World Development7(2):570.

Ahkoraa, p. 200. FDI i Crisis ad Recoery: lessos rom he 199798 AsiaCrisis. worki paers i trade ad Deeome 200/0, Research Schoo

o pacic ad Asia Sdies, Asraia naioa uiersiy, Caberra.. 2006. prodc Frameaio ad trade paers i Eas Asia. Asian

Economic Papers ():128.Brche, g. 2009. Te Emerece o Chia ad Idia as ne Comeiors i MnC

Ioaio neorks. Competition and Change 1():26788.Caes, R. E. 1996.Multinational Enterprise and Economic Analysis, Secod Ediio.

Cambride: Cambride uiersiy press.Che t. J. 1998. aiwanese Firms in Southeast Asia: Networking Across Borders.

Cheeham: Edard Ear.

Di, J. H. 199. Multinational Enterprises and Global Economy. Boso:Addiso wesey.Economist. 2008. Te Chaeers: A ne Breed o Miaioa Comay Has

Emered. 12 Jaary: 616.


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. 2009. Research ad Deeome: Asia is Seadiy Erodi Americasleadershi i Research Sedi. Jaary: 7.

Froo, K. 199. Foreign Direct Investment. Chicao: uiersiy o Chicao press.James, w., D. park, S. Jha, J. Joaich, A. terada-Haiara, ad l. Smo.

2008. Te uS Fiacia Crisis, goba Fiacia trmoi, ad Deeoi Asia:Is he Era o Hih groh a a Ed? ADB Ecoomics worki paer no. 19,Ecoomics ad Research Dearme, Asia Deeome Bak, Maia.

Ka, S. J., ad H. S. lee. 2007. Te Deermias o locaio Choice o SohKorea FDI i Chia.Japan and the World Economy19:160.

Kimra, F. 2006. Ieraioa prodcio ad Disribio neorks i Eas Asia:18 Facs, Mechaics, ad poicy Imicaios. Asian Economic Policy Review1:67.

lisey, R. E. 2001. Forei Iesme i Tree Fiacia Crises. nBER workipaers no. 808, naioa Brea o Ecoomic Research, Cambride, MA.

naho, B. 2007. Te Chinese Economy: ransitions and Growth. MIt press:Cambride, MA.

Ramseer, E. D., ad F. Sjohom. 2006. Multinational Corporations in Indonesiaand Tailand: Wages, Productivity and Exports. lodo: parae Macmia.

Tam S. Y. 2005. Outward Foreign Direct Investment from Malaysia: An ExploratoryStudy. ubished aer, Isie o Maaysia ad Ieraioa Sdies,naioa uiersiy o Maaysia, Seaor.

unCtAD. varios Years. World Investment Report. uied naios, geea adne York.

. 2009.Assessing the Impact of the Current Financial and Economic Crisis onGlobal FDI Flows. uied naios Coerece o trade ad Deeome,geea.

wes, l. t. 198. Tird World Multinationals. Cambride, MA: MIt press.


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New Munaona om Emegng Aa:Te Cae o Naona O Compane

ANdrEA GOldstEiN

Te hoy o goba oegn ec nvemen (Fdi) an o he e omunaona enepe , o a age exen, he hoy o he goba

o nuy. in he weneh cenuy, o-poucng Aa wa one o heman enaon o goba o Fdi ow an n he eay weny-cenuy Aa, ncung boh pouce an conume coune, homeo ome o he mo ynamc o compane wowe. T pape examne he o nuy n Emegng Aa o eny he man aco nem o poucon, ownehp, an govenance. Te man eaue o hemunaona expanon o he age Aan naona o compane, nem o couny o opeaon, paen o negaon, an eny moe, aecue. Te concung econ oune ome o he man mpcaono h nenaona ve, compang wh he e o he iaan enegy

company En n he 1950.

I. INTRODUCTION

Anayzng he gowh an eveopmen o munaona o compane cucao anayzng change n he geogaphy o nenaona bune.1 Te o ecowa one o he eco o become goba n em o ae an oegnec nvemen (Fdi) ow. in ac, ome o he wo age munaona

copoaon (MNC) eveope n peoeum (Jone 2005). in 1973, he op veAmecan o compane wee makng 80 pecen o moe o he po aboa

1Une ncae, h pape ee o he o eco ncung opeaon n exacon anpoucon a we a o enng an buon. Ahough naua ga no o, hee wo ueae eae by a numbe o gncan nk (Mabo 2002). inceangy, he o an ga buneeae nke boh n upeam an owneam aea.

Anea Goen an aocae eeache a Econpubbca, Unve Boccon, Man, iay. Teauho gaeuy acknowege ncve commen om Emun Amann, Juhahp Jongwanch, anhe pacpan o he Wokhop on Ouwa Foegn dec invemen om deveopng Aa he

on 27 Juy 2009 a Aan deveopmen Bank Heaquae. Te opnon expee an agumenempoye ae he auho oe eponby an o no neceay eec hoe o Econpubbca.

Asian Development Review, vo. 26, no. 2, pp. 2656 2009 Aan deveopmen Bank


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NEW MUltiNAtiONAlsFrOM EMErGiNG AsiA 27

(Feen 2006). in 2006, hee wee ou o compane among he wo opegh nonnanca MNC, anke by oegn ae (UNCtAd 2008).

Te nuy ao neeng becaue o eavey ong ong-emynamm (Mauge 2006). Beween 1928 an 1973, even age vecay-negae an moy pvae-owne o MNC (o nenaona o compane[iOC]) wee majo make paye an pce ee.2 Begnnng n he 1960,poucng coune cae ou ucceve naonazaon pocee, an by 1973hey conoe mo o he o poucon. some o hee coune ome heOganzaon o he Peoeum Expong Coune (OPEC) o coonae anuny peoeum poce n oe o ecue a an abe pce o peoeumpouce; an ecen, economc, an egua uppy o peoeum o conumng

naon; an a a eun on capa o hoe nveng n he nuy.3

Te sevense hae o he wo o ae e om abou 70 pecen n 1970 o aoun50 pecen by 1980.

sae-owne naona o compane (NOC) cono he majoy owowe hyocabon eouce enowmen, a we a many o he majo oan ga naucue yem (Pog 2007). A gobazaon ha pogeence he eay 1990, excuve acce o o eeve ha mae NOC om hesouh he eang paye n he o make.5 some o hee enepe haveexpane he opeaon gobayboh upeam o vey he pooo

an owneam (no peochemca, enee, an buon) o eachconume ecy. Acce o capa, echnoogy, an knowege ae vngoce behn hee venue. two eaue ae noewohy hee: o Fdi ow aeno ony Nohsouh bu ao an nceangy souhNoh an souhsouh(Ayku an Goen 2007) an, a om mananng an aveaa eaonhp,NOC an iOC omeme om panehp o gan acce o eeve anpoucon.

2Tee wee Exxon, Gu, texaco, Mob, sana O Company o Caona, BhPeoeum (BP), an roya duch she o he o-cae seven se. Fance Compagne

Fanae e Poe (ae toa) wa vuay he eghh membe o he even e (Jone2005, 68). Te seven se coaboae coey o e up o uppe: he Aaban AmecanO Company (Aamco) wa jony owne by Exxon, Chevon, texaco, an Mob; he iananConoum nvove a o hem ogehe wh toa.

3Te ounng membe n 1960 wee ian, iaq, Kuwa, sau Aaba, an Venezuea, aejone by Qaa n 1961, inonea an lbya n 1962, Une Aab Emae n 1967, Agea n1969, Ngea n 1971, an Ecuao n 1973. Gabon jone n 1975 an e n 1995, Angoa jonen 2007, an inonea upene membehp on 31 decembe 2008.

NOC ae back o he 1920 when Yacmeno Peoeo Fcae (YPF) wa ounen Agenna. Peoeo Mexcano (Pemex) came a b ae n he 1930.

5A he magn, a ew mae pvaey owne o compane om he Oganaon o

Economc Co-opeaon an deveopmen (OECd) coune (o-cae nepenen) haveemege a key paye n he eco oowng he ocung o age MNC n coe expoaone an eney acve an he avaaby o penu capa oppoune o he mnngnuy n nanca cene uch a lonon an toono.


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28 AsiAN dEVElOPMENt rEViEW

i hay upng ha Emegng Aaene hee a he boa m hagoe om Pakan o he Peope repubc o Chna (PrC) now ho o ome

o he mo ynamc NOC. Peona o Maaya now he wo econ ageMNC om a eveopng couny (UNCtAd 2008) whe he PrC an ina havenceae gncany he enegy conumpon a a hae o oa wo enegyue. in 1980, he PrC an ina ogehe accoune o e han 8 pecen o hewo oa enegy conumpon; n 2005 he hae ha gown o 18 pecen(EiA 2008). Ove h peo, poucon ha ao en gncany (n ac, heegon hae n he wo oa ha move om 7.2 pecen o 9.1 pecen aepeakng a 9.7 pecen n 1999), bu a a pace ha ha been a om ucen omanan noona e-ucency. in 1980, Emegng Aa wa poucng moe

qu han conume, a uaon ha wa pemaneny evee n 1987 anha une no an eve wenng gap n ecen yea. in 2006, o he me wa emae ha he egon pouce e han 50 pecen o nee. Teuaon n em o pove cue o eeve equay pecaou, amounngo 36. bon bae n 2009 (2. pecen o he wo oa) veu 37 bon n1980 (5.8 pecen). Owng o h hgh eve o epenence on oue ouce oo, Aan govenmen ae uppong oveea expoaon an eveopmen ohe omec upeam o nuy.

Te objecve o h pape o anayze he evouon o hee eang

Aan NOC (ANOC)wo om o-mpong coune (he Chna NaonaPeoeum Copoaon [CNPC] an ina O an Naona Ga Copoaon[ONGC]), one om an o-expong couny (Maaya Peona)whoeeveopmen ha geneae ubana aenon n bune an pocy cceaboa. Knowng abou he eaonhp beween he compane an heepecve govenmen, a we a beween he ae an auhoe n counewhee hey nve, neceay o uneanng he envonmen n whch heo nuy n each couny ha opeae an ou o whch he ANOC haveeveope. T nomaon w make pobe o unean he ANOCpeen acve an hep u o pec pobe uue eveopmen. Teecompane ae anayze n em o:

Wowe pea n egon an acve; shapng o govenance an nena oganzaon; Compaave compevene; an innovaon an echnoogca capaby.6

in oe o pove a compaave amewok, he ame aa poveo anohe vey ucceu emegng MNC, Peoba (he wo enh movauabe pubcy e company a en-Juy 2009). Te na econ cue

6Te npaon o h eamen he ou-voume hoy o roya duch she (vanZanen e a. 2007). Tey ao examne n ea he nne ynamc o copoae oganzaon(a Pozz 2009 n he cae o En). in h pape, no pobe o cove h apec nucen ea.


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he evovng oe o he ANOC n he nenaona o nuy, ao awngome paae wh he iaan enegy company En n he 1950. En wa he

Ween NOC o aggevey chaenge he seven se omnance, pompngeacon ha bea ome mae o hoe ha ae accompanyng he e ohe ANOC.

II. HIsTORy

O he ou emegng NOC examne n h pape, Peoba he oe. i waoune n 1953 an ome he nchpn o he ae-ven, nwa-oene

nuazaon ve o he me. Une he em o Baz law Numbe 200,Peoba wa gane oe gh ove omec upeam o expoaon anpoucon. i ao came o omnae omec enng acvy, ahough majooegn o m wee aowe o ean a oe n he owneam buoneco. in he 1960, Peoba uhe vee no peochemca, pay okck-a he gowh o h ynamc new nuy n Baz an pay o pevenoegn MNC om omnang (teba 1983).

ineengy, he Bazan expeence (an n pacua he economc cn Baz ha Peen Geo Vaga bame on oegn neeence) pay

a oe n he econ o inan Pme Mne Jawahaa Nehu o e up heO an Naua Ga decoae une he Mny o Naua reouce anscenc reeach n 1955 (Maan 2007). two yea ae, he O an NauaGa Common (ONGComm) wa bon a a auoy eny wh nancapowe, whch o he nex quae o a cenuy wou become nceangyacve n o expoaon, achevng ubana ucce n 197 wh heofhoe covey a Bombay Hgh. A pope NOC wa ony eabhe whenhe ONGComm became ONGC n 1993.

A he me o he o hock, howeve, Baz wa a ne o mpoe.in cona, abunan o wa covee n Maaya sabah an saawak (anteengganu) n he 1960, expoe by oegn majo hough aonaconceon (ram 1985). in he boae conex o he aunch o MaayaNew Economc Pocy, he govenmen, ao nuence by he conempoayinonean expeence wh naona o an ga company, Peamna,ece o eabh a ae monopoy ove hyocabon n 197. No whouconeaon by he oegn majo, vaou pouc hang ageemen (PsA)wee gne an Peona hen enee no o an ga expoaon hough awhoy owne ubay, Caga. in aon o beng a ong egona payen ene pouc ae, Peona ha been a eang poponen o age an

nancay compcae quee-naua-ga (lNG) pojec. Ta aegy hamae one o he mo mpoan ee o lNG n Japan; tape,Chna; anrepubc o Koea.


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in he PrC, he nuy omnae by wo ae mammoh. CNPC waceae n 1988 o hane a peoeum acve n he PrC ha wee ognay

he eponby o he Mny o Peoeum inuy. Te Chna Peoeum anChemca Copoaon (snopec) wa ome n 1983 ou o he owneam aeo he Mny o Peoeum inuy an he Mny o Chemca inuy. inJuy 1998, boh wee eucue no vecay negae goup o he amename. CNPC he age n em o poucon an po, bu no evenuebecaue snopec omnan n he enng eco.7

III. GOveRNaNCe aND TeCHNOlOGy

Even he mae NOC ae poweu oganzaon whn he naon-ae.A common o ae-owne enepe (sOE), NOC ae a numbe ononcommeca apaon, uch a empoymen geneaon an pce cono,bu a he ame me ae expece o peom commecay.8 A ma concemege n he eaonhp wh he naona bugeNOC oen pacegncan eman on pubc un an compee wh ohe ugen eveopmenpoe, bu hey ae ao a majo cah cow.9 Tee peue make NOCe ecen n ung he eeve baeaccong o Vco (2007), iOC ae

neay one-h bee han NOC a conveng o eeve no acua oupu.Ahough wh majo vaaon, a NOC ae anomng hemeve omae-omnae an bueaucac ene ha ey on a monopoc poon nhe home couny an ae ony accounabe o he govenmen o a ea paypvae-owne ene wh coeponng mocaon n he govenancemechanm. in he poce, NOC ae ao upgang he echnoogy poe ouppo he achevemen o he commeca goa. Howeve, n ohe key aea,noaby on ue o oveegny an he oe o eco can pay n eveopngan uanng naona econome, he NOC have much n common n he

7Te ohe majo ae-eco m he Chna Naona Ofhoe O Copoaon(CNOOC), whch hane ofhoe expoaon an poucon an accoun o oughy15 pecen o omec poucon. Unke e, oe no have mny ank an amoexcuvey an upeam company wh he excepon o a enng an peochemca jonvenue wh she. A ouh ae-owne o company, snochem, ha a me peence upeam(moy oveea) bu a noewohy ang, enng, an chemca pooo.

8Whe a NOC eman ae-conoe, non-weghe ae ownehp o he 10 ageOECd o compane (a e n he Fortune Goba 500 n 2009) 10.15 pecen (Ocobe 2009)an coepon o he Nowegan ae conong ake n saoHyo, o he eua akehe by he iaan govenmen n En, an o a mnoy pacpaon he by Mexco naona

o company Pemex n repoYPF. Poby he ony age-cae o pvazaon n a eveopngcouny ook pace n Agenna an evenuay e o he akeove o YPF by span age ocompany repo.

9Fo exampe, Pemex ha no nanca an economc auonomy; a opeaon, ncung buge, nee congeona appova.


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unamena phoophe an objecve, n a way ha nguhe hem omiOC (Khe 2008).

Aeay a he me o eabhmen, Peona wa a commeca, po-oene eny whoy owne by he Mny o Fnance (von e Mehen 2007).Fou o ubae ae e on he Bua Maaya, bu hee ae no mmeaepan o an na pubc ofeng. Te epuaon an auonomy o he enomanagemen v--v he poca powe no he pme mne, o whch epo10wa enghene by he ong eaehp o Azzan Zanu Abn,chaman om 1988 o 200. in a emony o he company hgh ana,Muphy an Huchnon (2001, 697) obeve ha we know o no ohe counyn whch he gue o ogna o an ga n pace ae avaabe om a naona

o company. Ta Maaya oe no have a Mny o Peoeum hepe nh epec. Te accumuaon o echnoogca compeence a Peona habeen emakabe becaue he ang conon wee anyhng bu avoabe.in he eay 1970, a ew a ve Maay wee enoe n engneeng ue,an moe geneay hey ha a vey mno peence n he uppe echeon ocopoae Maaya.

ONGC hae ae e, ahough he govenmen o ina ean acomoabe majoy (7.1 pecen, bu we n exce o 80.0 pecen akehe by ohe sOE ae ao coune). A a ae-un company wh a goo ack

eco n em o eanng po an poucvy, ONGC enjoy navratnaau.11 Te mne o Peoeum an Naua Ga eponbe o ONGC ano he ohe sOE n he nuy (uch a GAil an inan O). Each yea, hegovenmen an he navana compane gn a memoanum o uneanngpuang poucon age. in h eng, ONGC ao enjoy a cean eveo auonomy n em o copoae govenance. Te cuen che execuveoce, r. s. shama, wa eece o he op job by a each commee heaeby Pubc Enepe seecon Boa Chaman N. K. snha ae nevewng

10Te Peoeum deveopmen Ac 197 an he Ace o Aocaon govenng Peonagve he pme mne he aboue powe o appon an emove evey nge membe o heboa an managemen. Te pme mne ha he gh o appon o emove anyone, om hepeen an che execuve oce own o he company ve. in pacua, evey membe ohe boa an apponee o he pme mne, an epeen hm on he boa.

11Navana eay mean nne jewe. in Juy 1997, he govenmen ene nne pubceco enepe ha ha compaave avanage an poena o emege a goba gan. Teywee gven enhance auonomy an eegaon o powe o ncu capa expenue, o ene noechnoogy jon venue an aegc aance, o efec oganzaona eucung, o ceaean aboh beow Boa-eve po, o ae capa om omec an nenaona make,o eabh nanca jon venue an whoy owne ubae, ec. in 2008, n keepng wh

he pome mae n he Naona Common Mnmum Pogamme ha u managea ancommeca auonomy wou be evove o ucceu po-makng compane opeang na compeve envonmen, he govenmen eve an enhance he powe eegae o heboa o eco o navana pubc eco enepe.


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28 canae.12 Nonehee, n Mach 2009, Goman sach ae concenabou ONGC copoae govenance (an moe peccay he eamen o

he nea $20 bon ha ha been ue nce 2003 o ubze o-makng omakeng compane13).

Te vcue o he PrC o majo can be may een n he conexo he ncemena appoach o sOE eom (lee 2009); he o eco heup a a beacon o ohe eco o uy n eucung o ace he chaengeo gobazaon an conoaon (Zhang 200, 3). Te ae gp on CNPCeman m. shae ae he by he sae Counc an he company monoeby he sae-owne Ae supevon an Amnaon Common(sAsAC). Execuve poon ae e by he sAsAC wh ae an pay oca,

wh no npu equee om he boa, an ae een a ep n he caee o aucceu cv evan (Mock, Yeung, an Zhao 2007).1 A he ame me, wompoan ubae ae e oveea.15 Te PeoChna (n whchCNPC poee 86.7 pecen o hae a he en o 200816), whch goup moo he ae an abe o CNPC eang o expoaon an poucon,enng an makeng, an chemca an naua ga bunee. PeoChna he mo poabe company n Aa, pay owng o nea uopoy on hewhoeae an ea bune o o pouc n he PrC, an a en-Juy 2009wa he wo age company by make capazaon (Economist2009).

Te econ CNPC (Hong Kong, Chna), whch opeae n PrC, Kazakhan,Oman, Peu, Taan, Azebajan, an inonea. CNPC own 56.8 pecen ohe ubay hae.

CNPC, PeoChna, CNOOC, an snopec ag behn he goba gann eveopng wo-ca echnooge (Noan an Zhang 2002) an expoaonan poucon eeach no we eveope (Jn, Ba, an Manoo 2001).Exacng an eamen equpmen ae ehe mpoe o ony aembe nhe PrC, whou omec poucon. Key eeconc numen an owaeo expoaon an poucon ae mpoe a we. Howeve, he NOC omhe PrC have eceny caugh up wh ome o he o majo n evea caegoean ae pang no efo o he gap compeey. in 2000, he majo o m

12shama ha been he Pubc Enepe seecon Boa numbe one choce n a oun o nevew conuce. Howeve, he Pme Mne Oce veoe h apponmen a wane he eecon poce wene by nvng canae om he pvae eco.

13Te govenmen xe he pce o ome ue pouc uch a keoene an ee, o ompoe have eceny ncue oe by buyng a a hgh pce an hen eng ow n ina.see Financial imes (2009).

1When l Yzhong, hen chaman o he boa o CNPC, wa appone o he sAsACn Ap 2003, he wa epace by Chen tongha, a ome sae Pannng Common oca.Cuen CNPC Peen Jang Jemn wa depuy Goveno o Qngha Povnce om June 2000

o Ap 200.15Te govenmen cae na pubc ofeng o CNOOC an snopec beween 2000an 2002.

16incung hae he hough uy-owne ubay Fay Kng invemen lme.


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om he PrC ha oughy 20 pecen o he combne eeach an eveopmen(r&d) efo o toa, ExxonMob, an she. By 2006, PeoChna an CNOOC

aone nvee one h o he hee eang iOC ouay (Cavaho an Goen2009).

Te hee ANOC evewe n h pape have mae gea e n emo govenance an echnoogy. Peoba ha aguaby avance even moe han pee on boh accoun. i ha opeae n a compeve envonmen nce1997, when he govenmen cappe monopoy on o-eae acve, eeo pce om ae cono, opene he eco o compeon, an aunche apvazaon poce ha ha een he pubc ake a beow 0 pecen. Tepncpa govenmen agency chage wh monong he o eco he

Naona Peoeum Agency, whch ho eponby o ung expoaonan poucon cene an enung compance wh eevan eguaon.Ahough he boa cueny chae by he che-o-af o Peen luzinco lua a sva, mo o he company hae ae n pvae han. Peobaopeae ahe nepeneny om govenmen an ae pvae nancnghough pojec nance.

Peoba efo n he geocence an engneeng o eep an ua-eepwae e behn ecen avance n peoeum poucon an expoaon nBaz (Pea Fho, sva sano, an Manoo 2006).17 Te Ceno e Pequa

e deenvovmeno leopoo A. Mguez e Meo, eabhe n ro e Janeon 1966, ha pove an envonmen o eeach, nnovaon, an eveopmen(Manoo, Mohame, an schoze 2001). snce 1992, one pecen o Peobago ecep have been eamake o r&d. T genune efo a eveopngnena echnoogca compeence ha aowe Peoba o exac he upoena om coopeave r&d o gan acce o he new ubea boongechnoogy (Fuao an Gome e Fea 2000). Peoba ha e a numbe owo eco, ncung he eco (a one pon) o he eepe expoaon we,an ha won he Ofhoe technoogy Coneence awa wce (1992 an 2001)o exceence n eep wae opeaon. Baz became e-ucen n o uppy

17in he ae 1980, he covey o enomou o epo n he Campo Ban, of hecoa o ro e Janeo sae, poe coneabe phyca chaenge. Te geoogy o he ban wano aghowa, an he wae eph nvove wee a geae han hoe encounee n heohe gea ofhoe e o Gu o Mexco, Noh sea, an, moe eceny, Gu o Gunea. Tu,n 1986, Peoba aunche he Pogama tecnogco Empeaa e deenvovmeno emExpoao e gua Uapouna (PrOCAP, o deep Wae Expoaon syem Pogam),whch nay opeae n he Man an Abacoa e, a a eph o 1,000 mee. PrOCAP-2000 (1993) eache a eph o 1,867 mee n he roncao e, whe PrOCAP-3000 am aeachng 3,000 mee.


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n Ap 2006.18 Te covey o he tup o e of Baz ouheaen coa nNovembe 2007, he bgge n he wo nce a covey n Kazakhan n 2000,

ha he poena o anom Baz no a goba enegy powehoue. to exache o om tup e, Peoba engnee w have o up o ,800 meebeow he ea oo hough a an ock, n wae eph o up o 3,000 mee,an uneakng ha a he one o he nuy echnoogca aby.

Peoba oy how he cuca mpoance o accumuang echnoogcacapabe o eabh a eang nenaona poon. A dana an Be(2006, 9) ee, Peoba capabe evove om hoe o an maveechnoogy ue o hoe o a eang paye a he nenaona nnovaonone. saegc nen, ogehe wh he connuou evouon n he popee

o Peoba knowege newok o bu geae compemenae wh pane, wa he key.tabe 1 an 2 pove a aa-ven ynhe o he naave o he pevou

page. Te oowng geneazaon can be mae: CNPC/PeoChna much age han he ohe ANOC, ahough no

age han Peoba n em o ae; eman much mae hanshe, whch choen hee a a epeenave iOC;

CNPC/PeoChna ao he age ANOC n em o o pouconan eeve, ahough on boh accoun ha ecoe a a woe

peomance han Peoba nce 1999, wh gowh ae equa o8.3 pecen n o poucon an 6. pecen n o eeve, veuPeoba 65.9 pecen an 16.1 pecen;

Peona by a he age ANOC n he naua ga egmen, whee ho he wo nnh age eeve (an he age oue OPEC);an

CNPC/PeoChna makng an mpeve echnoogca efo ha compaabe o ha o he Une Kngom (UK)-bae iOC, ahoughhe eu n em o Une sae Paen an taemak Oce(UsPtO) paen gane eman e mpeve han o Peoba.

18Baz ha a vee enegy mx, wh o an naua ga accounng o e han50 pecen o nee (senne an Naco 2009).


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tabe 1a. K Corport Dt: Finnci ($ miion)

Tot at Tot Rnu Tot NtIncom Cpit ndeportorepn

1999 2007 1999 2007 1999b 2007 1999 2007

PeoChna 9,62 117,822 21,257 112,81 6,672 20,13 1,09 23,878

ONGC 2,5 20,30 ,686 13,76 1,319 3,801 825 ...

Peona 31,996 85,201 15,957 50,98 3,318 1,6 ... 5,992

Peoba 33,733 128,715 23,67 87,735 727 13,138 ,351 20,978

En 5,87 18,162 29,959 120,753 2,678 13,72 5,10 1,522

she 113,883 269,70 19,706 355,782 8,58 31,331 8,71 25,220

tabe 1b. K Corport Dt: Oprtion

OiProduction(miion o

brr)

Ntur GProduction(biion ocubic t)

Oi Rr(miion o

brr)

Ntur GRr

(biion ocubic t)

1999 2007 1999 2007 1999b 2007 1999b 2007

PeoChna 775 839 37 1,627 11,000 11,706 33,000 57,111

ONGC 193 ... 665 ... ,838 ... 22,88 ...

Peona 255 21 1,0 1,93 3,30 5,360 8,00 82,992

Peoba 22 700 263 656 8,279 9,613 7,98 12,57

En 26 372 810 1,502 3,137 3,925 13,6 11,20

she 828 66 2,91 2,250 9,775 3,776 58,51 0,895 ncae aa wa unavaabe o no appcabe.ONGC = O an Naona Ga Copoaon.

a Excep ONGC n 2000.b Excep ONGC an PeoChna n 2000.souce: Oil and Gas JournalOJG 100, vaou ue an compane annua epo.


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tabe 2. K Dt on Tchnoogic efort

Usbd UKbdb eUbdc CNPC/PtroChin ONGC Ptrobr Ptron

r&d expenue($mn, 2007/2008)

512.0 883.5 28. 727.7 ... 881.0 ...

r&d expenue(2005/2008aveage gowh, %)

1.7 59.0 (2.0) 66.0 ... 12.0 ...

r&d expenue(% o ae,2007/2008)

0.20 0.25 0.23 0.6 ... 1.0 ...

UsPtO paen(nce 1976)

3,512 3,200 181 9 0 172 5

ncae aa wa unavaabe o no appcabe.CNPC = Chna Naona Peoeum Copoaon; EU = Euopean Unon; ONGC = O an Naona GaCopoaon; r&d = eeach an eveopmen; UK = Une Kngom; Us = Une sae;UsPtO = Une sae Paen an taemak Oce.a ree o Exxon, Chevon, an Conoco.b ree o BP an she.c ree o toa, En, an repoYPF.souce: BErr (2009); Une sae Paen an taemak Oce, avaabe: www.upo.gov/paen/nex.

jp, accee 27 May 2009.

Iv. INTeRNaTIONal exPaNsION

Munaonazaon (n oe o pea echnca an poca k) a ypcaage n he eveopmen o compane n an ogopoc nuy (Gaham 1998).Te hee man moae o Fdi have hocay been jon venue, PsA,an equy nvemen, ncung pvazaon (Ayku an Goen 2007).19 inupeam acve, jon venue eman he man vehce o oegn nvemen

n o poucng coune.20 PsA aangemen pove paa hegng aganega an ax unceany an ae nceangy ue n oe o acceeae

19Ae he naonazaon poce o he eay 1970, mo o he coune oowe aconevave appoach n beazng he o eco. Mo govenmen mono an mhe opeaon o MNC. Nevehee, he echnoogca an ca equemen n he ecooce many govenmen o open up he eco o oegn nvemen.

20A jon venue a ega eny oune commony by a omec company an oegnpane. Te omec company uuay conbue mnea gh an he oegn pane

conbue cah, equpmen, an ohe popee. A o poucon he popey o he jonvenue, an a povon uuay mae o he paymen o ven o he pane n cah o nkn. Coune have he own pooco o jon venue n he o eco wh m o oegnequy, econ makng, an opeaona poceue o he company.


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expoaon opeaon an aac oegn nvemen.21 Mega-mege beweenmajo o MNC have been anohe majo epone ue o nceae eeve an

boo epenhmen ae. Foowng he o o majo o eeve n he 1970an gncan pce ucuaon n he 1980, he seven se mege wh oneanohe o manan he eang au v--v he NOC.22 ineengy, o avey ew majo mege have been co-boe, uggeng ha ecency-eekngan eouce-eekng move ae moe mpoan han make-eekng one. inecen yea, many nepenen o compane (o juno) ae beng gobbe upby majo an NOC.23 Nonehee, whe ANOC have puchae a numbe ouch juno, hee eman eavey ma opeaon. in ac, he age ANOCea he weneh age ea concue n he o eco wowe nce 2006

(En&Young, vaou yea).Peoba ha he onge hoy o nenaona expanon, angwh he ceaon o Bapeo n 1972. A he me, o mpo covee moehan 80 pecen o omec eman an he man pupoe o he companynenaona banch wa o guaanee uppy ecuy. Te nvemen weemae n iaq,2 Coomba Cabbean sea, Angoa, an Gu o Mexco. Nowaay,Peoba ho moe han 100 poucon cene n lan Ameca (Agennaan Venezuea), Gu o Mexco (whee own moe han 300 eepwae bock),an Aca (Ngea Agbam an Akpo e, bock 5 of tanzana Maa ian,

lbya Aea 18). Te Bova ppene enghene ga bune n he souhenCone. Agenna ha become he econ mo mpoan make o Peobaoowng he Peez Companc acquon n 2002. Moeove, oveea enng

21A PsA a conacua ageemen une whch he ae awa an nveo o a goupo nveo (conaco) o a cean peo o me an excuve gh o each, popec, anexac mnea eouce om a pecc aceage. Te nveo uneake he obgaon ocay ou hee wok o he ae peo o me a own expene an uuay beang a heaocae k. Te PsA w uuay pecy he poon o poucon ha can be eane byhe conaco o ecove he co (co o) whe he emanng po o p beween heae an he conaco accong o he omua e ou n he PsA. Te oyae o m on co

o o any gven yea enue ome govenmen evenue om he begnnng o he pojec e. inaon o po o, pane n he ageemen can be eve peoeum ncome ax an oheom o bonue.

22in ac, age ucuaon n goba Fdi ow n he eco ae pay afece by hemege wave ha geneae nan peak, whch n un epon o he hgh voay n o pcean ae o eun. Te wave o mege an acquon occue n he eay 1980 whenhe pce o o ecne om econ o c peak an ncue texaco $10 bon akeoveo Gey Ohen he bgge n hoy. A econ wave o mege an acquon ook pacebeween 1998 an 2002.

23inepenen ae mae compane ha ocu on appyng pecaze echnoogy anqueezng ou geae ecency om maue e an/o ake a cam n an expoaon pem

n magna an ky aea.2in Augu 1972, Bapeo gne a 2-yea k expoaon an poucon an evceconac wh iaq Naona O Company, ncung a 7-yea expoaon an appaa peo.Te gan Majnoon o e wa covee n 1975.


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capacy ha gone om zeo bae n 2000 o 126.2 houan bae o o peay n 2007 (Peoba 2008). Accong o aegc pan o 20082012,

Peoba expec o eaze oveea nvemen o aoun $15 bon n bohexpoaon an poucon, aong wh he nenaona expanon o ehanopoucon. reeve oue Baz wee e han 12 pecen n 2002 an oeo 17 pecen by 2010 (Cavaho an Goen 2009).

Peona ucceu oveea venue ook pace n 1991 n Ve Nam.toay, he company ha nvemen n moe han 30 coune, ncung moehan 20 eveopng coune.25 Peona ha been vey acve n Aca. insouh Aca, he Engen puchae gave cono o 18 pecen an 27 peceno enng capacy an ea-ue make, epecvey.26 Peona ao nae

own expoaon an poucon ea n suan, compeng a 1,500-komeeppene n wo yea an unng he couny no a ne o expoe o he me n 1999. i ucce n suan pompe ExxonMob o ofe Peonaa 30 pecen nee n a ppene venue n he repubc o Cha. Peonanvee $1.76 bon o acque naua ga eeve n Egyp n 2003, bough a$1.10 bon ake n rua rone n 2006, an ook cono o sa Enegy,one o he UK age ga oage bunee, n 2007.27 i eceny compeehe acquon o seena o iay, Euope age nepenen pouce anmakee o bane auomove ubcan. Peona ao panee wh Ween

enegy goup o eveop a lNG emna an ace n Wae (wh BP Enegy)an Auaa (wh sano). Tank o h ambou aegy, n 2007, evenueom nenaona opeaon nceae by 33.1 pecen o each 0.3 pecen oPeona oa an mae nenaona opeaon he bgge conbuo o goupevenue, o he me oveakng expo. Engen opeaon aone conbueamo 20 pecen o he company oa annua evenue. dung 200 o 2008,nenaona poucon gew om 23 pecen o 35 pecen o Peona oapoucon (we n exce o he goa e n 2003 [Far Eastern Economic Review2003]) an 18 pecen o empoyee ae non-Maayan.

depe eavey ho hoy a a qua-make nuy, n 2006, hePrC ock o oveea nvemen n mnng, quayng, an peoeum wacoe o $19 bon (OECd 2008). Kang (2008) emae ha CNPC/PeoChna,an o a ee exen CNOOC, snopec, an ohe, ha ecue oa equy no equvaen o oughy aoun 26 pecen o he PrC oa cue mpo n2007, 23 pecen o he PrC omec o poucon, 12 pecen o he PrC

25Peona nenaona upeam venue ae uneaken by expoaon anpoucon am, PEtrONAs Caga sn Bh. some nvemen ae mae va pvae meubae an geng o he boom o he company oegn venue aunng.

26

in Novembe 200, Engen an sao combne he lNG opeaon n a new jonvenue, Uhambo.27in 2002, a akeove aemp o tuow O (he age nepenen o an ga company

e on he lonon sock Exchange by unove) ae becaue o he oppoon o 35 peceno he Acan nveo.


42/166


cuen o conumpon, an 1 pecen o goba o poucon. CNPC began nenaona opeaon n 1993, aoun he me ha he PrC became a ne o

mpoe, when gne a evce conac wh he govenmen o Peu o managean o e (CNPC 2008).28 i bg eap ook pace n 1