WASHINGTON / BEIJING (Dow Jones) – The US was no longer the country with the highest FDI in 2020. New investment by foreign companies in the US fell 49 percent last year, according to United Nations data. In China, on the other hand, foreign direct investment rose by 4 percent. For decades, the US had topped the rankings.
The shift in foreign direct investment towards China has been going on for several years. But the development accelerated in the pandemic year 2020. China cemented its position as the world’s factory and increased its share of world trade.
In 2016, FDI in the US peaked at $ 472 billion, while China hit $ 134 billion at the time. Since then, investment in China has grown steadily, while that in the US has declined every year.
While China overtook the US last year, the total amount of foreign investment in the US is still much higher.
In 2020, there was a strong east-west contrast in foreign direct investment. East Asia attracted a third of all investments. In India, foreign investment rose 13 percent, largely thanks to stronger demand for digital services.
In the EU, however, investments plummeted by 71 percent. Italy and Great Britain, which were particularly hard hit by the corona pandemic, did not attract new investments. In Germany, foreign direct investment fell by 61 percent.
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