China tops US for foreign direct investment in 2020

China was the largest recipient of foreign direct investment last year, bringing in $163 billion; a swift recovery from Covid-19 helped its economy

China tops US for foreign direct investment in 2020
China outpaced the US in foreign direct investment in 2020, helped by its Covid response. Image: Reuters

(ATF) China saw $163 billion in inflows last year, compared to $134 billion for the United States, the United Nations Conference on Trade and Development (UNCTAD) said in a report released on Sunday January 25.

In 2019, the United States received $251 billion in inflows and China received $140 billion.

China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-stricken 2020 in remarkably good shape and remains poised to expand further this year even as the global pandemic rages unabated.

China’s gross domestic product grew 2.3% in 2020, official data showed last week, making China the only major economy in the world to avoid a contraction last year.

The world’s second-largest economy has surprised many with the speed of its recovery from the coronavirus jolt, especially as policymakers have also had to navigate tense US-China relations on trade and other fronts.

Overall, global foreign direct investment (FDI) collapsed in 2020, falling by 42% to an estimated $859 billion, from $1.5 trillion in 2019, according to the UNCTAD report.

“FDI finished 2020 more than 30% below the trough after the global financial crisis in 2009”, the UNCTAD said on Sunday.

FDI flows fell by 37% in Latin American and the Caribbean, by 18% in Africa, and by 4% in developing Asia, the report added.

East Asia accounted for a third of global FDI in 2020, while FDI flows to developed countries fell by 69%.

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China Foreign direct investment FDI UNCTAD report