China surpassed the US last year as the world’s best destination for new foreign direct investment, as the Covid-19 pandemic intensified an eastward shift in the center of gravity of the world economy.
New investments by overseas companies in the US, which for decades have been the no. 1 occupancy, according to UN figures released on Sunday, fell by 49% in 2020 as the country struggled to curb the spread of the new coronavirus and economic output declined.
The United Nations Conference on Trade and Development said foreign investment by foreign companies rose by 4% in China, which came in second place. Beijing has used strict barriers to largely curb Covid-19 after the disease first emerged in a central Chinese city, and China’s gross domestic product has grown, even though most other major economies did last year pulled together.
2020 investment figures underscore China’s move to the center of a long-dominated US economy – a shift that was accelerated during the pandemic as China reaffirmed its position as the world’s factory floor and its share of world trade expanded.
While China attracted more new inflows last year, the total stockpile of foreign investment in the US remains much larger, reflecting the decades it has spent as the most attractive place for foreign businesses looking to expand outside their home markets.