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China replaces the US as the number one recipient of new foreign direct investment

Ollie Gardner

25th January 2021

A sharp fall in the amount of new foreign direct investment (FDI) into the US last year compared to 2019 propelled China to become the number one recipient of new foreign investments in 2020.

As the only major economy to avoid a contraction in its level of GDP in 2020, China was able to attract 4% more new FDI than it did in 2019. This was despite global levels of foreign investment falling by 42% in 2020.

This data may represent an acceleration of China's rise to become the number one global economy. You can think about what this will mean in terms of global trade and protectionism, particularly following President Trump's departure, and how UK firms might respond to an ever strengthening Chinese economy.

Ollie Gardner

Ollie is a new economics teacher at an academically selective school having previously worked in the healthcare technology industry.

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