By Francis Ogwo
The United States of America lost its place as the largest receipient of foreign direct investment to China, a Bloomberg report has said.
Reports from United Nations Trade Agency said the 2020 survey came in a year when overall global flows crashed by 42% as a result of the coronavirus pandemic.
China according to reports took the lead with flows rising by 4% to $163 billion.
UNCTAD Investment Trends Monitor reported that there was a fall in flows to an estimate of $859 billion from $1.5 trillion in 2019. This became the lowest level since the 1990s and 30% below the investment trough that followed the 2008-09 global financial crisis.
By statistical reports, China survived the hardship imposed on global economy by the ravaging COVID-19 pandemic.
Investments in China was boosted by a return to positive GDP growth and a targeted investment facilitation program after the country’s first coronavirus lockdown.
The high-tech industries increased in FDI of 11% in 2020, cross-border mergers and acquisitions also rose by 54%. This was mostly in information and communications technology, and pharmaceutical industries.
There was also a slide in flows to North America by 46% to $166 billion, and those to the U.S. alone dropped by 49% to an estimated $134 billion in 2020.
Europe was not outstanding as their flows went down by two-thirds to a negative $4 billion. This was with the U.K’s FDI falling to zero, and with declines recorded in other major countries.
In Australia, there was a slump while Israel experienced a rise.
Globally, the UN agency expects foreign direct investment to remain weak in 2021 due to uncertainty over the evolution of the Covid-19 pandemic.
The Director of UNCTAD’s Investment Division, James Zhan, said: “The effects of the pandemic on investment will linger as investors are likely to remain cautious in committing capital to new overseas productive assets.”
According to Google, a Foreign Direct Investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.
