Global Flows of Foreign Direct Investment
Global flows of Foreign Direct Investment (FDI) peaked around 2007, when they totaled almost US$2 trillion. However, in 2014, global FDI was US$1.2 trillion, which represented a 16% decrease from 2013’s total of US$1.5 trillion. Meanwhile, in spite of a decrease in FDI, the global gross domestic products (GDP) as well as global trade grew between 2013 and 2014. Interestingly, during this period, developed economies saw a decrease in FDI, while developing economies witnessed an overall FDI increase, particularly in developing Asian nations. Furthermore, FDI directed towards developing countries represented 55% of the total, while FDI towards transitioning and developed economies accounted for the other 45%. In 2014, FDI into developed economies dropped 28% to a total of US$499 billion. For instance, FDI flows into Europe fell 11% to US$289 billion. In the case of Europe, Ireland, Belgium, France, and Spain saw a net loss on their FDI flow, while the United Kingdom, Switzerland, and Finland saw a net gain in FDI.
Between 2012 and 2014, developing economies in Asia, including China, but excluding Japan and South Korea, were the largest regional recipient of FDI. In 2012, developing economies in Asia received US$401 billion in FDI, which then increased to US$465 billion by 2014. Simultaneously, Latin America and the Caribbean registered US$178 billion in FDI during 2012, which subsequently decreased to US$159 billion in 2014. In the case of Europe, aggregate FDI decreased from US$401 billion in 2012 to US$289 billion in 2014. Likewise, FDI flows towards North America decreased from US$209 billion in 2012 to US$146 billion in 2014. Lastly, in the case of Africa, FDI in 2012 accounted for US$56 billion and subsequently decreased to US$54 billion in 2013 and 2014 respectively.
Global Flows of Foreign Direct Investment
Looking at specific countries, by far, the largest recipient of FDI in 2013 was the United States with a total of US$231 billion. However, this amount decreased substantially to US$92 billion in 2014. In the specific case of mainland China, FDI flows increased from US$124 billion in 2013 to US$129 billion in 2014. Similarly, within China’s Special Administrative Region (SAR) of Hong Kong, total FDI increased from US$74 billion in 2013 to US$103 billion in 2014.
Another way to consider FDI flows is by looking at regional organization or trade blocs, such as the Asia-Pacific Economic Cooperation (APEC), which is composed of Australia, Brunei, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the United States, China (including Hong Kong), Taiwan, Mexico, Papua New Guinea, Chile, Russia, Peru, and Vietnam. During 2013, APEC as a whole received US$837 billion in FDI, which then decreased to US$652 billion in 2014. Likewise, the three member countries of NAFTA, Mexico, Canada and the United States, received US$346 billion in FDI in 2013 and US$169 in FDI in 2014.
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(Read more about Agribusiness and Global Macroeconomic Factors)