In 2021, FDI across the Atlantic increased by 11.3% compared to 2020, placing China in third place, the IMF indicates.
The United States was the world’s top destination in terms of foreign direct investment (FDI) in 2021, overtaking China, which was relegated to third place, according to a note released Wednesday by the International Monetary Fund (IMF).
In one year, trans-Atlantic FDI increased by 11.3% (+$506 billion) compared to 2020, to reach a total of $4,977 billion, placing the United States far ahead of the Netherlands (4,331 billion dollars) and China excluding Hong Kong (3.578 billion dollars), slipped to third place.
Adding Hong Kong, however, the Middle Kingdom remains in first place, with a total of 6.891 billion dollars.
This data comes from the IMF’s annual FDI survey, gathering data from 112 countries.
Globally, FDI increased by 7.1%, if we consider the increases of individual national currencies. The increase is only 2.3% recorded in dollars, due to the strengthening of the greenback on the foreign exchange market.
The survey also highlights the presence of several small countries in the TOP 10, including Luxembourg, Singapore, Ireland and Hong Kong.
“The apparent disconnect between FDI data and the real economy stems from the fact that FDI are primarily financial statistics, which also take into account financial flows between entities having the same direct or indirect owner,” explained the authors of the report. note, Jannick Damgaard and Carlos Sanchez-Munoz.
FDI notably includes the flow of funds that pass through a country before reaching their final destination, “often for tax or regulatory reasons”, thus being able to “significantly inflate” FDI within the economy concerned.
The study carried out thus highlights the importance of offshore financial centers and their consequences in terms of FDI, “which have strongly increased in the years following the 2008 financial crisis”, even if their share has significantly decreased in the last five years.
