A United Nations trade agency reported that China surpassed the US as the main 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 FDI over the United States last year, with flows rising 4% to 163 billion. of dollars, Bloomberg News reported.
Most countries experienced declines due to the coronavirus pandemic, including the United States, which saw its flow fall by 49 percent to $ 134 billion, according to the UNCTAD Investment Trend Monitor. The decline in the US was observed in wholesale trade, financial services and manufacturing.
China’s return to positive GDP growth and targeted investment facilitation program contributed to the country’s FDI levels, the agency noted. in a statement.
Globally, flows fell 42% to $ 859 billion due to the coronavirus pandemic, compared to $ 1.5 trillion in 2019. Global foreign direct investment reached its highest level. low since the 1990s, including 30% lower than investments after the 2008-2009 financial crisis.
US flows fell 46% to $ 166 billion, but Europe fell by about 66% to a negative $ 4 billion.
The declines were concentrated in developed countries, where flows fell by 69%. Meanwhile, developing countries accounted for 72 percent of global FDI, the highest percentage recorded.
FDI is expected to remain volatile during 2021 as the coronavirus pandemic continues to impact the world.
“The effects of the pandemic on investment will persist,” James Zhan, director of UNCTAD’s investment division, said in a statement. “Investors are likely to be cautious when it comes to entrusting capital to new productive assets abroad.”