Here's an update on world Foreign Direct Investments
From the Economist, (bold underscore mine)
``THE flow of foreign direct investment (FDI) fell by 39% in 2009 to just over $1 trillion, from a shade under $1.7 trillion in 2008, according to the UN Conference on Trade and Development. All kinds of investment—equity capital, reinvested earnings and intra-company loans—were affected by the downturn. Rich countries saw FDI inflows plunge by 41%, and foreign investment into developing countries fell by more than a third. Not every country was badly hit. FDI into China, where economic growth remained robust, declined by only 2.6%. Foreigners actually invested more in Germany and Italy last year than in 2008. Despite FDI plunging by 57% last year, America remained the world’s top investment destination."
Additional comments:
-Despite the broadbased downturn, the US remains the largest recipient of FDI. This demolishes the fallacious protectionist notion that emerging markets have been "stealing investments and jobs" from Americans. Not until the US turns into a Peronist Argentina or suffer from outsized or hyperinflation will this happen.
-While the BRICs, especially China, have indeed been seeing bigger share of the FDI pie, they have not been able to supplant FDIs in developed economies...at least, not yet.
-Basically, investments based on free trade is not a zero game that sees one party benefit at the expense of the other. Free trade seen in the light of globalization has generally a net positive effect.
To quote HSBC's Stephen Green in a recent interview with Wall Street Journal, ``globalization is past the point of no return." What's more, globalization "is not an ideology. It's a fact. It's a phenomenon." Despite what certain rich 20-something protesters might have you believe, "It's not as if some thinker has imposed it . . . It's a fact, a phenomenon very deeply rooted in the human spirit."
Instead, it is malinvestments shaped by bubble policies that has severe self-destructive impact to economies by distorting price signals which eventually results to capital consumption.
And worst, it is the mercantilistic proclivities to institute "protectionism" that limits consumer choices which overall imposes an adverse effect to the society. The Smoot-Hawley act which dramatically worsened the Great Depression of 1930s should serve as a grim reminder of the self inflicting harm which results from policy myopia.
From the Economist, (bold underscore mine)
``THE flow of foreign direct investment (FDI) fell by 39% in 2009 to just over $1 trillion, from a shade under $1.7 trillion in 2008, according to the UN Conference on Trade and Development. All kinds of investment—equity capital, reinvested earnings and intra-company loans—were affected by the downturn. Rich countries saw FDI inflows plunge by 41%, and foreign investment into developing countries fell by more than a third. Not every country was badly hit. FDI into China, where economic growth remained robust, declined by only 2.6%. Foreigners actually invested more in Germany and Italy last year than in 2008. Despite FDI plunging by 57% last year, America remained the world’s top investment destination."
Additional comments:
-Despite the broadbased downturn, the US remains the largest recipient of FDI. This demolishes the fallacious protectionist notion that emerging markets have been "stealing investments and jobs" from Americans. Not until the US turns into a Peronist Argentina or suffer from outsized or hyperinflation will this happen.
-While the BRICs, especially China, have indeed been seeing bigger share of the FDI pie, they have not been able to supplant FDIs in developed economies...at least, not yet.
-Basically, investments based on free trade is not a zero game that sees one party benefit at the expense of the other. Free trade seen in the light of globalization has generally a net positive effect.
To quote HSBC's Stephen Green in a recent interview with Wall Street Journal, ``globalization is past the point of no return." What's more, globalization "is not an ideology. It's a fact. It's a phenomenon." Despite what certain rich 20-something protesters might have you believe, "It's not as if some thinker has imposed it . . . It's a fact, a phenomenon very deeply rooted in the human spirit."
Instead, it is malinvestments shaped by bubble policies that has severe self-destructive impact to economies by distorting price signals which eventually results to capital consumption.
And worst, it is the mercantilistic proclivities to institute "protectionism" that limits consumer choices which overall imposes an adverse effect to the society. The Smoot-Hawley act which dramatically worsened the Great Depression of 1930s should serve as a grim reminder of the self inflicting harm which results from policy myopia.
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