As the Biden administration in the United States strengthens its America-first policy centered on manufacturing and tightens the containment of China through export controls on advanced technologies such as semiconductors, it has been revealed that the scale of foreign direct investment (FDI) attracted by the U.S. last year significantly surpassed that of China.
According to data released on the 10th (local time) by KOTRA Washington Trade Center based on statistics from the Organisation for Economic Co-operation and Development (OECD), the U.S. shows a strong advantage over China in attracting global FDI.
Last year, the U.S. accounted for 24.9% of the global FDI inflow of $1.281 trillion. This is more than 10 percentage points higher than China’s 14.1%. Although the U.S. had lagged behind China in FDI inflows since 2010, it began to surpass China again starting in 2021, after the COVID-19 pandemic.
Countries with large FDI inflows to the U.S. as of 2021 were led by Japan at 13.9%. Following were the Netherlands (12.6%), Canada (10.6%), the United Kingdom (10.3%), and Germany (8.1%). South Korea’s share was 1.5%. The U.S. attracted a total of $333.6 billion in FDI in 2021, growing 2.3 times compared to the previous year.
South Korea is also among the countries that significantly increased investment in the U.S. While U.S. FDI in South Korea was $38.1 billion in 2021, South Korea’s FDI in the U.S. was $72.5 billion in the same year, nearly double.
The trade center stated, "FDI to the U.S., which had contracted during the pandemic, rapidly recovered as investments surged from countries such as South Korea, the Netherlands, the United Kingdom, and Ireland," adding, "FDI from South Korea in 2021 increased by 1089% compared to the previous year, recording the highest growth rate."
By industry, reflecting President Biden’s emphasis on the revival of U.S. manufacturing, manufacturing accounted for the largest share of total FDI to the U.S. at 42.4%. Within manufacturing, chemicals (38.9%), computers and electronics (10.3%), and transportation equipment (8.5%) ranked highest. Outside manufacturing, finance (12.5%), wholesale trade (9.7%), and information (5.6%) followed.
Meanwhile, amid rising U.S.-China tensions over issues such as the Taiwan Strait and export controls on advanced technologies like semiconductors, China’s FDI to the U.S. sharply declined from $53.5 billion (63 cases) in 2016 to $3.2 billion (5 cases) last year.
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