China’s early recovery from the COVID-19 pandemic helped it to overtake the US to become the world’s biggest destination for foreign investment in 2020.
China attracted USD$163 billion in foreign investment inflows last year, as compared to a figure of $134 billion for the US, according to figures released by the United Nations Conference on Trade and Development (UNCTD) on Sunday.
The US held the top spot in terms of foreign investment for decades, and in 2019 attracted $251 billion in foreign investment, as compared to China’s figure of $140 billion.
Foreign investment into the US hit a peak of $472 billion in 2016, while in the same year China’s foreign investment inflows totalled $134 billion. Foreign investment into China has continued to rise ever since however, yet for the US the figure has diminished since 2017.
According to UNTCD global foreign direct investment plunged in 2020 as a result of the COVID-19 pandemic, dropping 42% to $859 billion.
Investment in the US plunged 49% while developed countries posted an average decline of 69%. The European Union’s foreign direct investment dropped by 71%, and Germany saw a 61% decline. The UK and Italy, both particularly hard hit by COVID-19, saw no new foreign investment inflows whatsoever in 2020.
FDI into developing countries fell by 12% last year, yet China still managed to post a modest increase of 4%, as advanced lockdown measures left it the only major economy to see GDP growth in 2020.