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Asia-Pacific Citiesof the Future 2011/12WinnersSINGAPORE HAS REtAINEDItS POSItION At tHE tOP OffDi’s ASIA-PAcIfIc cItIES OftHE fUtURE RANKING, AHEADOf SHANGHAI AND SEOUL.cHINESE cItIES PERfORMEDPARtIcULARLY WELL, BUttHE EffEctS Of REcESSIONAND NAtURAL DISAStER HAVESEEN tOKYO fALL fROMSEcOND PLAcE tO NINtH.RACHEL CRAIG REPORtS

Singapore was the top-rankedcity in fDi’s Asia-Pacific Cities ofthe Future 2009/10 list and has

held on to first place in the 2011/12ranking. It scored well in all catego-ries, and was placed in the top five foreconomic potential, business friendli-ness and human resources, whileclaiming the top position for infra-structure and FDI strategy.

Singapore’s GDP per capita is oneof the highest among the cities in theranking, while its productivity is fore-cast to grow by more than 4% annu-ally over the next five years. The cityattracted 327 greenfield FDI projectsin 2010, according to data from fDiMarkets; an increase of 20% on theprevious year. More than 200 projectshave been recorded in 2011 (for thefirst three quarters).

Shanghai is ranked in secondplace and topped the economic poten-tial and human resources categories.The city has attracted more greenfield

FDI than any other in the Asia-Pacificregion and is home to more than500,000 students studying at an arrayof world-renowned universities.Shanghai performed notably stronglyin the business friendliness category.

Seoul finished third in the rank-ing, up from fifth place in the Asia-Pacific Cities of the Future 2009/10list. The South Korean capital per-formed well in the infrastructure andhuman resources categories, and isthe best connected city in the compe-tition, with direct flights to 130 inter-national destinations. The city has alarge student population and SouthKorea has the highest tertiary educa-tion enrolment rate in Asia-Pacific.

far eastern promiseChinese cities performed well in thecompetition; besides Shanghai insecond place, Shenzhen and Beijingalso made it into the top 10 in fourthand seventh place, respectively.

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still scored highly for infrastructure,largely due to their large ports, highbroadband penetration and internetaccessibility.

On topdownunderMelbourne and Sydney both featurein the top 10. Melbourne retains itsposition as the highest rankedAustralian city in the competition ateighth, while Sydney placed 10th.Australian cities performed well interms of foreign investment; year-on-year FDI projects increased by one-third in Melbourne, by 25% in Sydneyand by about 40% in Brisbane.According to the fDi Global OutlookReport 2011, capital investment intoAustralia increased 2.5-fold in 2010.Australia and New Zealand also dom-inated the quality of life category.

Phnom Penh in Cambodia is themost cost-effective location in theranking, followed by Hai Phong andDa Nang of Vietnam. Profit tax inCambodia is relatively low at 22.5%,and office and industrial costs arevery competitive in Phnom Penh,while property and labour costs arelow inneighbouringVietnam.Rayongin Thailand is also a notably strongperformer for cost-effectiveness. Itslow industrial rents and labour costshave helped the city attract 180 green-field FDI projects between 2003 and2011, the highest amount of FDI forcities of its size in the competition.

Busanand Incheon inSouthKoreaare new additions to the Asia-PacificCities of the Future 2011/12 ranking,both scoring well in the FDI strategycategory. Both are proactive in FDIpromotion and offer investors afavourable investment climate, skilledworkforce and good infrastructure.Incheon airport is the largest in SouthKorea and the port at Busan has thepotential to become a logistics hub fornorth-east Asia.

Chinese cities dominate the economicpotential ranking; seven of the top 10cities in the category are from China.GDP in China is forecast to grow byalmost 10% annually over the next fiveyears, and unemployment rates in thecountry are generally lower than inother cities in the Asia-Pacific region.

Taiwan capital Taipei is ranked fifthin the Asia-Pacific Cities of the Future2011/12 list, due in part to its high pro-ductivity, healthy export growth and agood track record as both a source anddestination for FDI. Taipei has attracted248 greenfield FDI projects since 2003according to fDi Markets and has beenthe source of 603 projects over the sameperiod. Hong Kong came sixth overalland scored particularly well in the eco-nomic potential, business friendlinessand FDI strategy categories. GDP percapita is high and exports from thecountry continue to grow, although at aslower rate more recently due to weakerdemand from the US and Europe. HongKong is in second place overall for theamount of greenfield FDI attractedadjusted for location size, second only toRayong in Thailand.

Tokyo has fallen from second placein the Asia-Pacific Cities of the Future2009/10 ranking but remains in the top10, in ninth place. Japan was one of thefew Asian economies affected by reces-sion in 2009, and growth for 2011 isforecast at -0.4%, according to theInternational Monetary Fund. However,Japan’s GDP is forecast to grow over thenext five years, albeit at a slower ratethan in neighbouring economies, andTokyo remains one of the wealthiest cit-ies in the region in terms of income percapita, scoring highly for infrastruc-ture, human resources and quality oflife. While damage from the earthquakeand tsunami that hit Japan’s north-eastcoast caused a drop in some Japanesecities’ FDI performance, the likes ofTokyo, Osaka, Kobe, Kyoto and Sapporo

rank cIty cOuntry1 Singapore Singapore2 Shanghai china3 Seoul South Korea4 Shenzhen china5 taipei taiwan6 Hong Kong china7 Beijing china8 Melbourne Australia9 tokyo Japan10 Sydney Australia

tOp10OVERALL RANKINGrank cIty cOuntry1 Dongguan China2 Shenzhen china3 Singapore Singapore4 Hong Kong china5 Ningbo china6 Auckland New Zealand7 Shanghai china8 Wellington New Zealand9 Melbourne Australia10 Sydney Australia

tOp10 BUSINESS fRIENDLINESS

rank cIty cOuntry1 Phnom Penh Cambodia2 Hai Phong Vietnam3 Da Nang Vietnam4 Johor Bahru Malaysia5 Hanoi Vietnam6 Vientiane Laos7 Kathmandu Nepal8 Multan Pakistan9 Alor Setar Malaysia10 Rayong thailand

tOp10 cOSt EffEctIVENESSrank cIty cOuntry1 Shanghai China2 Singapore Singapore3 Beijing china4 Hong Kong china5 Shenzhen china6 Macao china7 Guangzhou china8 Kunshan china9 Suzhou china10 Ashkhabad turkmenistan

tOp10 EcONOMIc POtENtIAL

rank cIty cOuntry1 Shanghai China2 tokyo Japan3 Beijing china4 Zhengzhou china5 Singapore Singapore6 Melbourne Australia7 Seoul South Korea8 Zhongshan china9 Brisbane Australia10 Shijiazhuang china

tOp10HUMAN RESOURcESrank cIty cOuntry1 Singapore Singapore2 tokyo Japan3 Seoul South Korea4 Hong Kong china5 Osaka Japan6 Kobe Japan7 Kuala Lumpur Malaysia8 Bangkok thailand9 Kyoto Japan10 Sapporo Japan

tOp10 INfRAStRUctURE

rank cIty cOuntry1 Singapore Singapore2 Melbourne Australia3 Hong Kong china4 Brisbane Australia5 Sydney Australia6 Busan South Korea7 Auckland New Zealand8 Perth Australia9 Guangzhou china10 chengdu china

tOp10 fDI StRAtEGYrank cIty cOuntry1 Canberra Australia2 Wellington New Zealand3 Sydney Australia4 Ipswich city Australia5 Gosford city Australia6 tokyo Japan7 Auckland New Zealand8 Brisbane Australia9 Singapore Singapore10 Gold coast Australia

tOp10QUALItY Of LIVING INDEX

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34 www.fDiIntelligence.com December 2011/January 2012

0 2 4 6 8 10

Rayong

HongKong

Chonburi

Changshu

Singapore

Score

US$0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Singapore

Perth

Macao

Tokyo

Ulsan

0 2 4 6 8 10

Canberra

JohorBahru

Chittagong

Changsha

Zhengzhou

Score

ScOrefOrfDI prOjectSper100,000pOpulatIOn (rank)

0 2 4 6 8 10

Seoul

Singapore

HongKong

Bangkok

Kuala Lumpur

Score

ScOrefOr InternatIOnalaIrcOnnectIOnS

0 2 4 6 8 10

Shanghai

Singapore

HongKong

Beijing

Bangalore

Score

ScOrefOrgreenfIelDfDI prOjectSjanuary2003tO july2011

ScOrefOrperfOrmanceaSDeStInatIOncIty, fDI prOjectgrOwthrate2009-10

gDppercapIta (uS$, purchaSIngpOwerparIty)

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36 www.fDiIntelligence.com December 2011/January 2012

juDgIng crIterIaECONOMICPOTENTIAL• Population growth rate• Growth in Imports 2006-09• Growth in Exports 2006-09• GDP per capita, PPP ($INT)• GDP growth rate 2008-10• Forecast GDP growth rate 2011-16• As destination city, no of greenfield FDIprojects (Jan 2003 to Jul 2011)

• As source city, no of greenfield FDIprojects (Jan 2003 to Jul 2011)

• As destination country, FDI projectgrowth rate 2009-10

• No ofmega projects – by jobs (Jan 2003to July 2011)

• No ofmega projects – by capex (Jan2003 to July 2011)

• As destination city, no of greenfield FDIprojects per 100,000 population (Jan2003 to Jul 2011)

• As source city, no of greenfield FDIprojects per 100,000 population (Jan2003 to Jul 2011)

• Unemployment rate first quarter of2011*

*Or latest data available

HUMANRESOURCES• Labour force• Literacy rate• Top 500 universities• Number of international schools• No of universities• No of students• Students as a percentage of totalpopulation

• Primary education enrolment rate• Secondary education enrolment rate• Tertiary education enrolment rate

COSTEFFECTIVENESS• Registering property – cost (% of

property value)• Cost of dealing with constructionpermits (% of income per capita)

• Profit tax• Hotel price (US$)• Minimumwage (US$ per week)• Office Rent (US$ per sqmper year)• Industrial Rent (US$ per sqmper year)• PPP/Exchange rate

BUSINESS FRIENDLINESS• Number of days to start a business• Ease of doing business Index• Five-year cumulative change in Ease ofDoing Business Index

• Number of Companies in high techmanufacturing per 100,000 population(2011)

• Number of Companies in high techservices per 100,000 population (2011)

• Number of companies in theknowledge based sector per 100,000population (2011)

• Perception of Corruption score 2010• Euromoney Country Risk score 2011• Estimated number of jobs created byFDI (2003 to July 2011)

• Corporation tax rate (%)

INFRASTRUCTURE• Quality of overall infrastructure• Quality of roads• Quality of railroad infrastructure• No of large/very large ports/inlandports

• Internet users (per 100 people) 2009• Growth in Internet users (per 100people) 2006-2009

• Fixed broadband Internet subscribers(per 100 people) 2009

• Growth in Fixed broadband Internetsubscribers (per 100 people) 2006-09

• Mobile phone subscribers (per 100people) 2009

juDgIngpanel

anupamprakaShPartner, Mercer

SanjayVermaChief executiveofficer, Asia-Pacific,cushman & Wakefield

rOymelIckPartner and chair,Asia-Pacific structuredreal estate group,Baker & McKenzie

jameSkuManaging director,Indev Partners

lawrenceyeOChief executiveofficer and principalconsultant,AsiaBIZ Strategy

fDi Cities of the Futureshortlists are created by inindependent collection ofdata by fDi Benchmarkacross 141 Asia-Pacific cit-ies. This information wasset under six categories:economic potentia l ,human resources, cost-effectiveness, quality of

In April 2008, the FinancialTimes acquired fDiMarketsand fDi Benchmark. fDiMarkets is an independentdatabase tracking globalFDI on a real-time basiswhereas fDi Benchmark is

life, infrastructure andbusiness friendliness. Aseventh category wasadded to the scoring – FDIpromotion strategy. In thiscategory, 32 Asia-Pacific cit-ies submitted details abouttheir promotion strategyand this was judged andscored by our independentjudging panel.

an independent databasewhich benchmarks globallocations on how attractivethey are to foreign inves-tors. This division com-piled the majority of thedata for the Cities of theFuture competition with

Cities scored up to amaximum of 10 pointsunder each individual cri-ter ion which wereweighted by importance togive the overall scores.Where data is availableonly at a national ratherthan city level, a lowerweighting was generallyapplied.

the exception of the FDIpromotion strategy, whichwas submitted by individ-ual cities and judged byour judging panel. Thesechanges have made thecompetition even moreobjective.

methODOlOgy

nOteS

• Growth inMobile phone subscribers(per 100 people) 2006-09

• Internet speeds upload (kbps)• Internet speeds download (kbps)• No of airports within 50miles• Distance to nearest airport• No of International destinationsserved

QUALITYOF LIFE• Life expectancy• Infantmortality rate• Access to cleanwater• Income per capita• Unemployment rate• Literacy rate• Public expenditure on education• Percentage of the populationwithtertiary education

• EIU democracy index• Risk/safety index(Information collected by fDi Benchmark)

FDI PROMOTIONALSTRATEGY• Number of staff dedicated to promotingand facilitating inward investment

• Key initiatives that are beingimplemented to attractmoreinvestment

• Information on high growth sectors/sub-sectors in the city which offerexcellent potential for inwardinvestment

• Description of incentives which areavailable to inward investors, outliningwhere possible the typical size ofincentives

• High profile, world class property/sitesavailable in the city suitable forinvestors tomove into, with basicinformation on each property ifavailable

(Information provided by cities and judgedby our judging panel)