A United Nations trade agency reports that China overtook the United States as the largest recipient of foreign direct investment (FDI) in 2020.
The United Nations Conference on Trade and Development (UNCTAD) concluded that China became the largest recipient of foreign direct investment last year over the United States, increasing inflows by 4 percent to $ 163 billion. Reported by Bloomberg News.
Most countries have seen a decline due to the coronavirus pandemic, including the United States, which has seen its flow drop by 49 percent to $ 134 billion, according to the UNCTAD Investment Trends Monitor. In the United States the decline was in wholesale trade, financial services, and manufacturing.
The agency noted that China’s return to positive GDP growth and the targeted investment facilitation program have helped levels of foreign direct investment in the country. 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 since the 1990s, including 30 percent fewer investments after 2008-2009 financial crisis.
Flows in North America were down 46 percent to $ 166 billion, but Europe saw a drop of nearly 66 percent to $ 4 billion.
It found that the declines were concentrated in developed countries, where flows fell by 69 percent. Meanwhile, developing countries accounted for 72 percent of global foreign direct investment, the highest proportion on record.
FDI is expected to remain fragile through 2021 as the Coronavirus pandemic continues to affect the world.
“The effects of the epidemic on investment will continue,” James Zhan, Director of the Investment Division at UNCTAD, said in the statement. “Investors will likely remain wary in allocating capital to new productive assets abroad.”