China eclipses US in FDI
Newly released trade and GDP data for 2020 shows the stellar performance of China’s economy despite the COVID- 19 outbreak. The world’s second- largest economy also attracted the largest amount of foreign direct investment ( FDI) last year.
China was ranked No. 1 with FDI of $ 163 billion in 2020, according to the UN’s latest report on global investment, eclipsing the US, which attracted $ 134 billion.
Global FDI plunged 42 percent to an estimated $ 859 billion last year amid the pandemic, and it was more than 30 percent below the trough seen after the global financial crisis in 2009, a report by the UN Conference on Trade and Development ( UNCTAD) said on Sunday.
China bucked the trend, with an increase of 4 percent from 2019, making it the world’s largest recipient. In 2019, the US received $ 251 billion in FDI inflows and China received $ 140 billion.
“FDI in China, where the early phase of the pandemic caused a steep drop in capital expenditures, ended the year with a small increase,” said the report.
Major foreign- invested projects in many areas of China were breaking ground near the end of last year. Global research and development centers, headquarters projects, and supply- chain operation centers have become the first choice of foreign investors, who have been attracted by the significant potential of China’s market and the resilience of its economy, the only major economy to grow last year.
Gao Lingyun, an expert from the Chinese Academy of Social Sciences in Beijing, said that “it’s really a hardwon achievement, not only growing but also exceeding the US.” Despite the rising anti- globalization sentiment, with some Western governments calling on their enterprises to move their industry chains out of China, the market- oriented players voted with their feet, Gao noted.
Wang Xiaohong, deputy director of the Information Department, China Center for International Economic Exchanges, told the Global Times on Monday that China’s advantage in stabilizing the supply chains, its huge market and improving business environment played key roles in foreign investors’ decisions.
“Emerging first from the COVID- 19 disruptions, China offers overseas investors a sense of safety, like a safe haven against the dismal world,” said Wang, adding that the signing of the Regional Comprehensive Economic Partnership ( RCEP) among the world’s largest trade bloc also enhanced expectations for freer trade.