GLOBAL UPDATE – China Surpasses the U.S. As Top Destination For Foreign Investment
- China overtook the U.S. as the world’s top destination for foreign direct investment (FDI) in the first half of 2012, receiving $59.1 billion in foreign direct investment versus $57.4 billion received by the U.S in the same period. By comparison, in 2011, China attracted $116 billion while the U.S. attracted $227 billion in FDI.
- In the first half of 2012, global foreign direct investment (FDI) inflows reached US$668 billion, down 8% compared with the same period of 2011. The $61 billion decline in FDI was mostly attributable to a decline of US$37 billion in inflows to the United States (-39% from the same period in 2011) and a $23 billion decline to BRIC countries.
- The declines were caused by steep falls in both greenfield investment projects (-40%) and cross-border M&A transactions (-60%).
- UNCTAD revised down its full year forecast, projecting that FDI flows will, at best, level-off in 2012 at slightly below US$1.6 trillion. The slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes continue to reinforce the wait-and-see attitude of many transnational companies toward investment abroad.