Foreign companies are giving up on the United States and betting big on China, report says


New York (CNN Business)Foreign companies are turning their backs on the United States, taking advantage of China’s booming economy and superior management of the Covid-19 pandemic.
Direct investment in the US by foreign companies plummeted 49% to $134 billion last year, according to a report released Sunday by the United Nations Conference on Trade and Development. By contrast, foreign direct investment in China grew by 4% to $163 billion in 2020.
2020 marked the first year in history that foreign direct investment in China overtook that of the US, according to the UN. China is now the world’s largest recipient of foreign companies’ investments.
Although Covid-19 was a large factor in foreign direct investment tumbling in the US — and most places around the world — the drop-off in foreign companies’ American investments began well before the pandemic.
After hitting a high of $440 billion in 2015, according to the US Commerce Department, foreign investment in the US has been on a sharp downward slide. Former President Donald Trump’s go-it-alone trade policies hurt foreign investment — particularly from China, which represented the sharpest drop in US investment over the past several years. Growing economic uncertainty around the globe also contributed to the decline.
Last year, decline in foreign direct investment into the US was most prominent in wholesale trade, financial services and manufacturing, the report said. International mergers and acquisitions, as well as sales of US assets to foreign investors, fell by 41%. Source: CNN

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