A United Nations trade agency reported that China has overtaken the United States as the largest beneficiary of foreign direct investment (FDI) in 2020.
The UN Conference on Trade and Development (UNCTAD) concluded that China became the largest recipient of FDI in the US last year, with flows up 4% to $ 163 billion Bloomberg News reported.
Most countries saw declines due to the coronavirus pandemic, including the US, which saw its flow decline by 49% to $ 134 billion, according to the UNCTAD Investment Trend Monitor. The US decline was seen in wholesale, financial services and manufacturing.
China’s return to positive GDP growth and the targeted investment facilitation program have contributed to the country’s FDI levels, the agency said. in a statement.
Globally, flows fell 42 percent to $ 859 billion due to the coronavirus pandemic, compared to $ 1.5 trillion in 2019. Global foreign direct investment reached its lowest level in years. 1990, including 30 percent less than investments after the 2008-2009 financial crisis.
North American flows fell 46 percent to $ 166 billion, but Europe fell about 66 percent to $ 4 billion negative.
Declines proved to be concentrated in developed countries, where flows fell by 69%. Meanwhile, developing countries accounted for 72% of global FDI, the highest percentage recorded.
FDI is expected to remain volatile in 2021 as the coronavirus pandemic continues to have an impact on the world.
“The effects of the pandemic on investment will persist,” said James Zhan, director of UNCTAD’s investment division. “Investors are likely to remain cautious in committing capital to new productive assets overseas.”