Japan’s ASEAN Formula Japan’s early experiences with FDI in the ASEAN countries could serve as a useful point of reference as China pursues a similar, albeit more extensive, outbound investment path via BRI today. In the 1980s, Japan, facing mounting trade frictions with the United States, began investing heavily in the Southeast Asian countries as external export platforms which were also attractive on account of their significantly lower production costs (Guisinger, 1991; Urata, 1993). Offshoring of Japanese manufacturing to ASEAN countries, especially in electronics, machinery, consumer goods, and later automobiles, made Japan’s exports more competitive in Western developed countries and more affordable in newly emergent intra-ASEAN and wider East Asia markets. Japanese production arrangements typically involved electronics components being produced by a parent company in Japan or by Japanese subsidiaries in other developed countries or in the “Newly Industrialized Economies” (i.e., South Korea, Hong Kong, Singapore, and Taiwan) (Urata, 1993). These electronic components were then shipped to other Japanese subsidiaries in the ASEAN countries or back to the home country where final products such as TVs and refrigerators were assembled. Such cross-border business operations involved what is known today as the New International Division of Labor (NIDL). The ASEAN economies attracted Japanese FDI in manufacturing as they could provide the skilled labor necessary for industrial manufacturing processes. The above was made possible by substantial infrastructure investment from the ADB, led and preponderantly financed by Japan, in the construction of roads, bridges, hydropower dams, and power plants and grids. Such ADB-financed infrastructure supported FDI by Japanese and non-Japanese MNEs in ASEAN, which, in turn, was a major factor underlying the development of Southeast Asia.