China has overtaken the United States as the world’s top destination for new foreign direct investments, according to the United Nations figures released in the first quarter in 2021. As new investments into American businesses have fallen by almost half as of last year, Chinese firms have climbed up to 4% causing the United States to loss its number one status and China becoming the top destination for foreign investment. With the top ranking, this shows China’s growing influence on the world economic stage.
In 2020, China had a grand total of 163 billion dollars of foreign investment in comparison to the 134 billion dollars of foreign investment attracted by the US, the United Nations Conference on Trade and Development according to its report.
Although China may be number one for new foreign investment, the US is still dominant when it comes to total foreign investments. This is because it reflects what the US has been developing in decades spent in its most attractive location for foreign businesses looking to broaden its horizons and expand overseas. Experts would however like to point out that the figures from this year’s new foreign investment report underlines China’s motive and ambition to move towards the center of the global economy which has been dominated by the United States the largest economy in the world. The UK-based Centre of Economics and Business Research predict China will leapfrog the US in 2028.
As the US continues its fall in foreign investments, China’s has continued to rise. This has been highlighted more clearly as the US economy continues its struggle since the Covid-19 outbreak last year, China has picked up the pace. China’s economic growth, which is measured in gross domestic product (GDP) grew by 2.3% in 2020. This makes China the only major economy in the world to avoid a contraction last year. This has surprised many economists with the speed of its recovery something of discussion. This is especially surprising as China is currently in a trade war with the US.
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