Singapore Loses Nokia to China

Source: The Wall Street Journal, 05 January 2012

Notch one more victory for China in the battle to lure investment from the Western world. Finland’s Nokia Corp., the world’s largest mobile phone maker by volume, said it is moving its Asia-Pacific headquarters to Beijing from Singapore. The move is a disappointment for Singapore, which along with other Southeast Asian nations has been scrambling to hold on to (or win back) Western investment after years of rising interest in China, whose rapid growth and giant consumer market helped it eclipse the one-time “tiger” economies of Southeast Asia over the past decade.

More recently, many analysts have argued Southeast Asia is starting to look more attractive again as disenchantment with China spreads due to rising costs, intellectual property violations, and other problems there, along with rising incomes in Southeast Asia. But at the end of the day, it’s hard to beat China, whose costs are still a lot lower than places like Singapore, and whose expanding consumer market dwarfs the smaller countries of Southeast Asia.