A United Nations trade agency reported that China surpassed the US as the largest recipient of foreign direct investment (FDI) in 2020.
The UN Conference on Trade and Development (UNCTAD) concluded that China became the largest recipient of FDI over the US last year, up 4 percent to $ 163 billion. Bloomberg News reported.
Most countries saw declines due to the coronavirus pandemic, including the US, which saw its flow drop 49 percent to $ 134 billion, according to UNCTAD’s Investment Trends Monitor. The US decline was seen in wholesale, financial services and manufacturing.
China’s return to positive GDP growth and a targeted investment facilitation program helped the country’s FDI levels, the agency noted in a release.
Globally, flows fell 42 percent to $ 859 billion as a result of the coronavirus pandemic, compared to $ 1.5 trillion in 2019. Global FDI hit its lowest level since the 1990s, including 30 percent less than post-financial investment. crisis of 2008-2009.
North American flows were down 46 percent to $ 166 billion, but Europe saw a decline of about 66 percent to $ 4 billion negative.
The declines appeared to be concentrated in developed countries, where flows were down 69 percent. Meanwhile, developing countries accounted for 72 percent of global foreign direct investment, the highest percentage recorded.
The FDI is expected to remain shaky in 2021 as the coronavirus pandemic continues to impact the world.
“The effects of the pandemic on investment will linger,” James Zhan, director of UNCTAD’s investment division, said in the press release. “Investors are likely to remain cautious about allocating capital to new overseas productive assets.”