China overtook the United States as the world’s top destination for new foreign direct investment last year, as the Covid-19 pandemic amplifies a shift to the east at the center of gravity of the global economy.
New investments by foreign companies in the U.S., which for decades ranked first, fell 49% in 2020, according to UN data released on Sunday, as the country struggled to contain the spread of the new coronavirus and economic production plummeted.
China, which has long been in second place, has seen direct investment by foreign companies rise by 4%, said the United Nations Conference on Trade and Development. Beijing used strict restrictions to largely contain Covid-19 after the disease first emerged in a city in central China, and China’s gross domestic product grew despite the contraction of most other major economies last year. .
The investment figures for 2020 underline China’s move towards the center of a global economy long dominated by the US – an accelerated change during the pandemic, as China consolidated its position as the world’s shop floor and expanded its participation in global trade.
Although China attracted more new inflows last year, the total stock of foreign investment in the United States remains much larger, reflecting the decades that have passed as the most attractive location for foreign companies looking to expand outside their domestic markets.