Southeast Asian governments are closely monitoring a potentially worrisome trend -- a decline in Japanese industrial investment in their countries. While Japan has been investing abroad at a record pace, less and less of this money is being channeled toward the six nations that make up the Association of Southeast Asian Nations (ASEAN).
Partly to cope with the protectionist threat in the United States and Western Europe, Japanese companies are more and more placing their manufacturing operations there.
And growing emphasis on technology rather than labor-intensive industries is also hurting the newly industrializing ASEAN states.
With much of the region in economic difficulties, there is keen awareness of a need to persuade Japan to keep up its high level of investment -- even while, ironically, elements in these countries grumble about Japanese economic domination.
One key concern is that the changing Japanese orientation will influence other investors, many of whom who tend to regard the Japanese as the barometer for Asia.
``The Japanese are the bravest in terms of taking risks,'' says Hadi Susastro of the Center for Strategic and International Studies, Indonesia's influential think tank. ``If they are already affected, they'll affect the Europeans and Americans as well.''
According to Keizai Doyukai, an important Japanese businessmen's association, Japan has investments totaling $12.6 billion in 869 ASEAN projects in Singapore, Thailand, Malaysia, the Philippines, and Brunei.
But a recent study by the Japan External Trade Organization shows clearly the changes under way in Japanese thinking on overseas investment.
In the 1970s, the Japanese invested more heavily on resource development and labor-intensive, low-cost manufacturing ventures in developing countries. But the emphasis has now shifted to high-tech manufacturing operations, particularly automobiles and electronics in the developed world.