Global foreign direct investment (FDI) plunged by 42 percent in 2020 while China bucked the trend by becoming the world's top recipient of investment flows.
"A return to positive gross domestic product growth and the government's targeted investment facilitation program helped stabilize investment after the early lockdown," said James Zhan, UNCTAD's director of investment and enterprise.
(Xinhua / Zhang Yuwei)
GENEVA, Jan. 24 (Xinhua) -- Global foreign direct investment (FDI) plunged by 42 percent in 2020, a new report by the United Nations Conference on Trade and Development (UNCTAD) showed on Sunday, while China bucked the trend becoming the world's top recipient of investment flows.
In its latest Investment Trends Monitor, the Geneva-based UN trade and development body said that FDI fell sharply to an estimated 859 billion U.S. dollars last year, from 1.5 trillion U.S. dollars in 2019, and warned of further weakness this year, putting a sustainable recovery from COVID-19 pandemic at risk.
"FDI finished 2020 more than 30 percent below the trough after the global financial crisis in 2009 and back at a level last seen in the 1990s," the report wrote.
The data showed that the decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated 229 billion U.S. dollars, the lowest level in 25 years.
Flows to Europe dried up completely, tumbling by two-thirds to minus 4 billion U.S. dollars, it noted. In Britain, FDI fell to zero, and declines were recorded in other major European recipients. A sharp decrease of 49 percent to 134 billion U.S. dollars was also recorded in the United States.
(Xinhua / Ding Ting)
CHINA A BRIGHT SPOT
The decline in developing economies was relatively measured at 12 percent to an estimated 616 billion U.S. dollars, the report showed, while China topped the ranking of the largest FDI recipients.
FDI flows to China rose by 4 percent to 163 billion U.S. dollars, making the country the world's largest recipient in 2020, followed by the United States.
China's high-tech industries saw an increase of 11 percent in 2020, and cross-border mergers and acquisitions (M&As) rose by 54 percent, mostly in information and communications technology (ICT) and pharmaceutical industries, the report said.
"A return to positive gross domestic product (GDP) growth and the government's targeted investment facilitation program helped stabilize investment after the early (coronavirus) lockdown," James Zhan, UNCTAD's director of investment and enterprise, said in a virtual press conference.
"The global dependence on the supply chains of multinational enterprises in China during the pandemic also sustained the FDI growth in China," he added.
The country saw its GDP increase by 2.3 percent year on year last year and is expected to be the only major economy to post growth in the pandemic-ravaged year, according to the National Bureau of Statistics (NBS).
China to boost global cooperation at WEF on ‘fighting COVID-19, economic recovery’
Asia, Europe stand closer as US in flux: analysts
By Yang Sheng
Chinese President Xi Jinping will attend the Davos Agenda of the World Economic Forum (WEF) and deliver a speech via video link on Monday, as leaders of major world economies and international organizations are set to attend the annual forum which is to be held online for the first time due to the COVID-19 pandemic, although US President Joe Biden is a notable absence from the attendee list.
According to the WEF website on Saturday, world leaders including Xi and German Chancellor Angela Merkel will address how the virus has reshaped society and what policies are needed going forward in 2021, focusing on the central theme of "A Crucial Year to Rebuild Trust."
They will be joined by other leaders including European Commission President Ursula von der Leyen and World Health Organization (WHO) Director-General Dr Tedros Adhanom Ghebreyesus.
Xi's attendance at the virtual WEF is the first major diplomatic event in 2021 for the Chinese president at a critical time when the world remains engulfed in the COVID-19 pandemic and amid lasting disruptions to global cooperation from unilateralism orchestrated by the US, analysts said.
"Rebuilding trust and increasing global cooperation are crucial to fostering innovative and bold solutions to stem the pandemic and drive a robust recovery," said Klaus Schwab, Founder and Executive Chairman of the Forum, according to the WEF website.
"This unique meeting will be an opportunity for leaders to outline their vision and address the most important issues of our time, such as the need to accelerate job creation and to protect the environment," he noted.
Schwab emphasized "rebuilding trust" because mutual trust between major countries had been seriously damaged in the past few years when Donald Trump was president of the US, and now it is time to fix the problem and clean up the mess, Chinese analysts said.
Li Haidong, a professor at the Institute of International Relations at China Foreign Affairs University, told the Global Times that the voice from China will be essential and valuable for the world at this moment, as China is the most stable major economy which is providing strong certainty in an uncertain world amid the pandemic.
"China can connect the topics of fighting COVID-19 with economic recovery, and will further strengthen multilateralism by pushing the idea of 'a community with a shared future for mankind' which shows consistency with Xi's previous remarks at the WEF 2017," Li noted, adding that China could also voice support for existing international cooperation mechanisms such as the WHO, since the former Trump administration of the US has had a pernicious effect on international cooperation.
Leaders from most major economies will attend the virtual event, including French President Emmanuel Macron, Japanese Prime Mister Yoshihide Suga, Indian Prime Minister Narendra Modi, Singaporean Prime Minister Lee Hsien Loong and South Korean President Moon Jae-in. UN Secretary-General António Guterres will also attend.
However, Biden, the new leader of the biggest economy of the world, is missing from the list, with analysts saying that his administration is mostly consumed by domestic problems and so it prefers not to speak to the world at this time, and would listen first to what other countries would say.
Wang Yiwei, director of the institute of international affairs at the Renmin University of China in Beijing, said that the WEF decided to hold the forum after the formal transition of power in the US, which shows its regard for the Biden administration. It hopes the new US president could attend via video link, but it seems the US is not ready to speak to the world.
"Biden has promised to return to multilateralism and reenter some international agreements or treaties that Trump withdrew the US from, but to what extent he could fulfill his words is a question. Some unfair tariffs that the US imposed on its trade partners including China and EU countries are unlikely to be rolled back, so before the US take concrete actions to fix its image, its expression would be weak in the front of international community," Wang said.