FX.co ★ China overtakes US as world’s top destination for FDI

Despite the coronavirus pandemic, the Chinese economy has shown great results. In fact, China became the only major economy to expand last year, which made it more attractive to foreign investors. According to independent monitoring groups, China overtook the United States as the world’s top destination for foreign direct investments (FDI) in 2020. The US has been an absolute leader in this field for decades. However, the coronavirus crisis made its own adjustments. As a result, foreign investments in the US immediately plunged by 49%. Meanwhile, China saw direct investments by foreign companies to increase by 4%, the United Nations Conference on Trade and Development said. Analysts believe last year’s broad economic downturn as well as the sharp drop in foreign investments in the US are the direct outcome of the coronavirus crisis. Nevertheless, if the country’s authorities bring the spread of the infection under control in the short term, the inflow of FDI to the US will rise again. Notably, the total stock of foreign investments in the US remains much larger compared to China.