CHINA OVERTAKES US AS WORLD’S TOP INVESTMENT MAGNET: UNITED NATIONS

China overtook the flagging United States to become the top destination for foreign direct investment (FDI) last year, according to UNCTAD. The United States has long been the world leader in attracting FDI, traditionally made up mainly of cross-border mergers and acquisitions and new corporate projects overseas, but last year its net inflows fell by two-thirds to $86 billion.
That was largely down to a deal between US firm Verizon Communications Inc and its British partner Vodafone, which included a share buyback that reversed $130 billion of foreign investment out of the United States.
Meanwhile China’s share of global FDI has been creeping up, reaching $128 billion last year.
There has been an increase of FDI into the services sector, and a slowdown of growth into manufacturing. And within manufacturing, investment into high tech is growing while labour intensive FDI has been declining.

Globally, FDI flows fell by 8 per cent last year to $1.26 trillion, the second lowest level since the start of the financial crisis. The fragile world economy, hesitant consumer demand, currency volatility and geopolitical instability could all deter investors. In 2014, many economies saw an increase including the European Union, which attracted $267 billion, 13 per cent up from 2013, and India, with a 26 per cent surge to $35 billion. Security worries contributed to a slowdown in the Middle East and North Africa, while lower commodity prices helped cut FDI flows to Latin America by 19 per cent to $153 billion.
Flows to Russia fell to about $19 billion, a drop of 70 per cent from 2013, a year when its FDI was boosted by a single big oil deal.