China overtakes US as top destination for foreign investment
Al Edwards / Our Today
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As the Chinese economy goes from strength to strength, recording growth even during the global COVID-19 pandemic, the country set another milestone, overtaking the United States to become the number one destination for foreign investment.
According to a released United Nations Conference on Trade and Development (UNCTAD) report, China saw US$163 billion flow into the country from foreign investments in 2020.
This compares to $134 billion in new investments from foreign companies in the US last year.
The US saw a whopping drop of 49 per cent in foreign direct investments (FDI) last year while Europe’s FDI fell by two-thirds.
According to Forbes, FDI across the world last year fell by 42 per cent from $1.5 trillion in 2019 to $859 billion in 2020.
“The effects of the pandemic on investment will linger. Investors are likely to remain cautious in committing capital to new overseas productive assets,” said the Director of UNCTAD’s Investment Division, James Zhan.
In 2019, the U.S. received over a $100 billion more in FDI than China at $251 billion in inflows compared to China’s $140 billion.
“Emerging first from COVID-19 disruptions, China offers overseas investors a sense of safety, like a safe haven against the dismal world,” said Deputy Director of the Information Department at China’s Center for International Economic Exchanges, Wang Xiaohong.
China’s economy grew by 2.3 per cent last year making it “the only major economy in the world to avoid a contraction last year. Many economists have been surprised with the speed of its recovery, especially as it navigated tense relations with the U.S.,” reported the BBC.
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