According to the latest figures released from the UN, China has replaced the US as the world’s top location for new foreign direct investment.
New investments from overseas into US companies plunged by nearly 50% in 2020. Meanwhile, in China, direct investment from abroad rose 4% which puts China at the top, replacing the US.
The United Nations Conference on Trade and Development (UNCTAD) reported that China had $163bn (£119bn) in inflows in 2020, compared to the $134 billion attracted by the US.
Last year’s figures were in stark contrast to the investment amounts of 2019. In 2019, the US received $251 billion in new foreign direct investment whilst China received $140 billion.
US Foreign Investment Slump
The latest figures are a continuation of a four slump in the US. Foreign investment in the US hit its highest in 2016 at $472bn. At the same time, foreign investment in China was just $134 billion.
Since 2106, investment in China has steadily increased, whilst in the US foreign investment has fallen each year.
The report underlines the widely held belief that China will replace the US as the world’s strongest economy within the next decade.
According to the UK-based Centre for Economics and Business Research (CEBR), China has been predicted to overtake the US to the number one position by 2028.
The Chinese economic recovery of last year has been well documented. China’s gross domestic product (GDP), grew 2.3% in 2020, making it the only major economic power not to register a contraction in their economy last year.
