1、commonslibrary.parliament.uk Research Briefing 20 June 2023 By Matthew Ward Foreign Direct Investment Statistics Summary 1 What is foreign direct investment?2 Inward FDI in the UK 3 UK investment abroad4 World FDIForeign Direct Investment Statistics 2 Commons Library Research Briefing,20 June 2023 N

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8、y and our editorial policy at commonslibrary.parliament.uk.If you have general questions about the work of the House of Commons email hcenquiriesparliament.uk.Foreign Direct Investment Statistics 3 Commons Library Research Briefing,20 June 2023 Contents 1 What is foreign direct investment?5 1.1 Flow

9、s 5 1.2 Stocks 6 2 Inward FDI in the UK 7 2.1 FDI inflows in 2021 7 2.2 Inward FDI stocks in 2021 10 2.3 Inward FDI by UK region and country 11 2.4 FDI stock on an immediate and ultimate basis 12 2.5 Recent trends in inward FDI in the UK 14 2.6 Inward FDI:impacts of Brexit and Covid 15 2.7 EY,attrac

10、tiveness surveys 16 3 UK investment abroad 19 3.1 FDI outflows,2021 19 3.2 Recent trends in FDI outflows 20 3.3 Outward FDI stocks,2021 20 3.4 Recent trends in outward FDI stocks 21 4 World FDI 23 4.1 Flows 23 4.2 Stocks 26 Foreign Direct Investment Statistics 4 Commons Library Research Briefing,20

11、June 2023 Summary This briefing examines recent trends in UK and world foreign direct investment(FDI)using data from the Office for National Statistics(ONS)and United Nations Conference on Trade and Development(UNCTAD).UK FDI In 2021:The value of foreign direct investment into the UK,i.e.,inward flo

12、ws,intothe UK were worth-51.7 billion,down from 34.8 billion in 2020.The value of inward FDI in the UK(i.e.,the stock of FDI invested in the UK)was 2.0 trillion,up very slightly from 2020.The value of outward FDI flows(i.e.,investments made by UK companiesin companies abroad)was 61.7 billion,compare

13、d to-74.8 billion in2020.The value of the UKs outward investment position abroad(i.e.,the stockof UK FDI invested abroad)was 1.8 trillion,up very slightly from 2020.World FDI In 2021:The value of world inward flows rebounded,after falling sharply in 2020,reaching$1.6 trillion,an increase of 64%in ca

14、sh terms compared to2020 and an increase of 7%compared to 2019.The USA maintained its position as the worlds largest recipient of inwardFDI flows,accounting for just under a quarter of world inward investmentflows.The USA also the worlds largest investor abroad,accounting for arounda quarter of outw

15、ard FDI flows.Foreign Direct Investment Statistics 5 Commons Library Research Briefing,20 June 2023 1 What is foreign direct investment?Foreign direct investment(FDI)is defined as investment in an enterprise operating in a foreign economy,where the purpose is to have an effective voice in the manage

16、ment of the enterprise.In FDI statistics,an effective voice is owning 10%or more of a company;any investment below this is counted as portfolio investment and not included in FDI statistics.1 FDI can cover a range of forms of investment,some examples include:A UK company establishes a branch or subs

17、idiary in a foreign country,injecting start-up capital.This is often known as a greenfieldinvestment.A UK company buys or sells(fully or partially)the equity of an existingforeign company.This is often known as M&A(mergers and acquisitions)activity.A UK company puts additional capital into an existi

18、ng foreign subsidiaryor allows it to retain profits rather than return them to the parentcompany.FDI can be either inward or outward:Inward FDI measures investments made in a country from anothercountry for example investment from a foreign country into the UK.Outward FDI measures investments made b

19、y domestic companies in aforeign economy for example investment from the UK into a foreigncountry.FDI statistics measure two different concepts flows and stocks.1.1 Flows Flows measure annual levels of investment on a net basis.2 For example,in the UK,inward flows would measure foreign companies inv

20、estments in the 1 See Background notes,Foreign direct investment involving UK companies:2015,ONS,December 2016 2 Meaning disinvestments will be included Foreign Direct Investment Statistics 6 Commons Library Research Briefing,20 June 2023 UK,while outward flows would measure investments made by Brit

21、ish companies abroad.Flows data can vary significantly from year to year and should be used with caution-a significant proportion of FDI flows can be accounted for by large multinational mergers and acquisitions and do not necessarily indicate significant greenfield investments.High flows can also b

22、e dominated by a small number of high value transactions.1.2 Stocks The stock measure records the total book value of all existing FDI,inward or outward at the end of a given period,rather than being a sum of investment over time.Consequently,stock values are subject to changes in valuation in compa

23、ny accounts,as well as exchange rate fluctuations,and values can change from year to year even without new investments.Foreign Direct Investment Statistics 7 Commons Library Research Briefing,20 June 2023 2 Inward FDI in the UK This section looks at the UKs level of inward FDI flows and stocks in 20

24、21(the most recent year for which data are available),as well as recent trends.Data is taken from the Office for National Statistics(ONS)release Foreign direct investment involving UK companies:2021,as well as the United Nations Conference on Trade and Development(UNCTAD)database on bilateral FDI.2.

25、1 FDI inflows in 2021 In 2021:The value of foreign direct investment into the UK(i.e.,the value ofinward flows)was-51.7 billion,down from 34.8 billion in 2020.3Negative flows mean outflows of investment exceed inflows and canindicate and can indicate things like disinvestment,discharges ofliabilitie

26、s,company dividends exceeding recorded income or companyoperations being at a loss.4The USA was the single largest investor in the UK,with investment of 6.2billion,down from 16.9 billion in 2020.Net investment from theAmericas as a whole was-19.8 billion.The Netherlands accounted for the UKs single

27、largest disinvestment,with net inward investment of-24.0 billion.Net investment from the EU was-24.1 billion,compared to 28.0 billionin 2020,while net investment from Europe as a whole was-27.6 billion.Overall,net investment was negative from all continents except Africa,which recorded a positive in

28、ward investment flow of 0.3 billion.3 ONS,Foreign direct investment involving UK companies:2021,23 January 2023.4 Eurostat,Negative foreign directive investment(FDI)values Foreign Direct Investment Statistics 8 Commons Library Research Briefing,20 June 2023 2021 is the first year the value of the UK

29、s annual inward investment flows have been negative since 1984.This fall is in part as a result of the coronavirus pandemic and global recession and associated disruptions to investment activity,though is also a continuation of a long-term trend.The ONS have also changed their methodology for collec

30、ting FDI statistics from 2020 onwards and advise caution in comparing FDI data pre and post 2020.5 2021 marks the fifth successive year inward FDI flows into the UK have fallen-inward FDI flows reached a high of 192.0 billion in 2016,before falling in each subsequent year.While the fall in value of

31、inward FDI flows into the UK since 2016 may seem dramatic,it is important to remember that inward flows can be very volatile from year to year and that 2016s total was unusually high.This was attributed by the Office for National Statistics to“a handful of high-value mergers and acquisitions”in 2016

32、,notably four foreign acquisitions of British companies each with an individual value in excess of 10 billion,including the 79 billion takeover of brewer SABMiller and the 24 billion takeover of chipmaker ARM.6 The value of inward mergers and acquisitions has generally fallen since 2016.In 2020,they

33、 fell to their lowest value since 2014,increasing slightly in 2021.5 ONS,Foreign direct investment statistics,overview of methods changes:2020,3 February 2022 6 ONS,UK foreign direct investment,trends and analysis 30 January 2018 Source:ONS,Foreign direct investment involving UK companies:2021,Janua

34、ry 2023 UK inward investment flows by area billions,2021-60-50-40-30-20-10010AfricaAustralasia&OceaniaEurope,non-EUAsiaAmericasEUEuropeWorldForeign Direct Investment Statistics 9 Commons Library Research Briefing,20 June 2023 Trends in inward FDI into the UK as a percentage of GDP over the last deca

35、de are shown in the graph below.In 2016,the value of the UKs inward FDI was equal to 9.6%of GDP.This has now fallen year-on-year since 2016 and was equal to-2.3%in 2021.The average over the last 10 years has been 2.4%.Source:ONS,Foreign direct investment involving UK companies:2021,January 2023;Merg

36、ers and acquisitions involving UK companies,June 2023 Source:ONS,Foreign direct investment involving UK companies:2021,January 2023;series YBHA UK,value of inward FDI flows and inward M&A activity billions,2012-2021-100-500501001502002502012201320142015201620172018201920202021Inward M&AInward FDI fl

37、owsUK inward FDI flows%GDP,2012-2021-4%-2%0%2%4%6%8%10%12%2012201320142015201620172018201920202021Foreign Direct Investment Statistics 10 Commons Library Research Briefing,20 June 2023 2.2 Inward FDI stocks in 2021 In 2021:The value of the inward FDI stock in the UK(i.e.,the stock of FDI investedin

38、the UK)was 2.0 trillion,up from 1.9 trillion in 2020.EU countries accounted for 34%of the stock of FDI in the UK,down from37%in 2019.The EUs share of the stock of FDI in the UK fluctuatedbetween 34%and 50%over the last decade.Looking at individual countries,the USA accounted for just over a third of

39、the UKs inward stock of FDI,slightly below the EU.Over the last decade,the USAs share the stock of FDI in the UK has fluctuated between 24%and 34%.Europe as a whole(i.e.,including European countries outside the EU)accounted for 48%of the stock of inward FDI in the UK,down from a highof 61%in 2013.So

40、urce:ONS,Foreign direct investment involving UK companies:2021 billions%totalUSA675.733.7%Netherlands217.510.9%UK Offshore Islands205.010.2%Luxembourg121.36.1%France100.95.0%Japan92.04.6%Belgium88.84.4%Switzerland74.43.7%Canada42.42.1%Spain41.32.1%EU685.134.2%Non-EU1,317.365.8%World2,002.4100.0%UK i

41、nward FDI stock 2021Foreign Direct Investment Statistics 11 Commons Library Research Briefing,20 June 2023 2.3 Inward FDI by UK region and country Since 2022,the ONS have produced data on UK inward FDI,broken down by region and country of investment.7 In 2021(the most recent year for which data are

42、available),5 of the 12 regions and countries of the UK experienced positive inward investment flows,while seven experienced a net disinvestment.Yorkshire and Humber had the highest positive inward investment,with an inward investment flow of 3.9 billion,while Scotland had the highest net disinvestme

43、nt of-18.2 billion.7 See ONS,Foreign direct investment,experimental UK subnational estimates:2021,23 April 2023 Source:ONS,Foreign direct investment involving UK companies:2021 Stock of international investment in the UK%total,202148.5%42.4%34.2%8.2%7.8%0.8%0%10%20%30%40%50%60%EuropeAmericasEUEurope

44、,non-EUAsiaAustralasia&OceaniaUK inward FDI flows by region and country billions,2021-20-15-10-505Foreign Direct Investment Statistics 12 Commons Library Research Briefing,20 June 2023 In terms of inward FDI stocks,in 2021,London accounted for 45%of the stock of inward FDI in the UK,while the South-

45、East of England accounted for 17%.Combined,London and the South-East accounted for 62%of the UKs total stock of inward FDI.Companies for which ONS could not calculate subnational results have been placed in the not allocated category.2.4 FDI stock on an immediate and ultimate basis All figures in th

46、is section are based on investments made on an immediate parent company basis,with the geographical origin of investment in the UK being based on the country in which the company is resident,rather than the residence of the ultimate parent company.The ONS now produce FDI statistics that reflect inve

47、stment made on the basis of the ultimate controlling parent company(i.e.,over 50%of the voting power).This approach is designed to reflect not where the financial flow necessarily comes from directly,but rather“identifies the country of the ultimate decision-maker for each UK business receiving FDI.

48、”8 8 ONS,UK foreign direct investment,trends and analysis:July 2019,28 July 2019 Source:ONS,Foreign direct investment,experimental UK subnational estimates:2021 Source:ONS,Foreign direct investment,experimental UK subnational estimates:2021 UK inward FDI stock by region and country%total,20210%10%20

49、%30%40%50%Foreign Direct Investment Statistics 13 Commons Library Research Briefing,20 June 2023 This distinction is important as it can highlight offshore investment that is investment that effectively passes through one country en route to another.An International Monetary Fund(IMF)paper on the su

50、bject describes this as the difference between“phantom FDI”,which it describes as“investments into empty corporate shells with no link to the local real economy”and real FDI,which it describes as investment“between an investor in one economy and an active and substantial business in another economy.

51、”9 The paper uses the example of Luxembourg,which records inward investment levels similar to the USA(despite the USA having a population around 550 times larger)though this is largely investment that passes through Luxembourg“without leaving many real traces in the transit”;accordingly Luxembourgs

52、outward FDI flows roughly matches their inward FDI flows.10 A 2019 Financial Times article described phantom FDI as playing“no productive role in the economies which host it,instead it is moved around the world purely to reduce big companies tax bills.”11 Such investment is often conducted through s

53、pecial purpose entities(SPEs).These are legal entities set up to“obtain specific advantages from a host economy”,in which they have“little to no employment,physical presence,or production.”Often,these are set up in offshore financial centres,to benefit from low taxes in the host economy.12 As a resu

54、lt,these entities can“inflate FDI data considerably”,while having little impact on the host economy.13 The table below shows the stock of international investment in the UK on the basis of the ultimate controlling parent country of investments in 2020(the most recent year for which data is available

55、).The main difference in these approaches is seen in investments from Europe and the Americas.Investments from the EU fall from 39%of the stock of inward investment in the UK on an immediate basis to 30%on an ultimate basis,whereas investments from the Americas increase from 36%on an immediate basis

56、 to 45%on an ultimate basis.Much of this is accounted for by investment from the USA,which increases from 25%on an immediate basis to 36%on an ultimate basis.Investment from other continents and areas remain broadly similar.9 J.Damgaard,T.Elkjaer,and N.Johannesen,What Is Real and What Is Not in the

57、Global FDI Network?IMF Working Paper,11 December 2019,p 1-2 10 J.Damgaard,T.Elkjaer,and N.Johannesen,as above,p 1-2 11 Phantom investment calls for an exorcism,Financial Times,10 September 2019 12 Evrim Bese Goksu,Theo Bikoi,Padma Hurree Gobin,Special Purpose Entities Shed Light on the Drivers of Fo

58、reign Direct Investment,IMF,25 March 2022 13 Jannick Damgaard,Carlos Snchez-Muoz,United States Is Worlds Top Destination for Foreign Direct Investment:The move comes amid a decline in offshore financial centers share of global FDI,IMF,7 December 2022 Foreign Direct Investment Statistics 14 Commons L

59、ibrary Research Briefing,20 June 2023 2.5 Recent trends in inward FDI in the UK The chart below shows the UKs world ranking in terms of the stock of inward FDI since 1990.Over this period,the UKs position in the world has fluctuated between fifth and second,while the United States has been ranked fi

60、rst every year.Between 2015 and 2018,the UK was ranked third in the world,behind the USA and Hong Kong,before overtaking Hong Kong to reach second in the world in 2019,before falling back to third in 2020,behind the USA and the Netherlands and subsequently returning to second in 2021.In 2021,the val

61、ue of the stock of inward FDI in the UK was$2.63 trillion,behind the USA at$13.6 trillion and ahead of the Netherlands on$2.60 trillion.14 Again,it is important to remember stock values are subject to changes in valuation in company accounts,as well as exchange rate fluctuations,and values can chang

62、e from year to year even without new investments.14 Data taken from UNCTAD Stat database Source:ONS,Inward FDI involving UK companies:immediate and ultimate basis,July 2022 Stock of international investment in the UK%total,202039%36%14%10%1%30%45%11%9%1%0%10%20%30%40%50%EUAmericasEurope,non-EUAsiaAu

63、stralasia&OceaniaImmediateUltimateForeign Direct Investment Statistics 15 Commons Library Research Briefing,20 June 2023 2.6 Inward FDI:impacts of Brexit and Covid The available evidence on the impact of Brexit and Coronavirus pandemic on inward investment in the UK is mixed.Quarterly data produced

64、by the ONS indicates that inward investment in the UK continued to grow after the EU referendum result in June 206 and grew in 14 of the 20 quarters between Q1 2017 and Q4 2021,albeit at a much slower rate than in 2016.Again,it is important to remember that 2016s total was exceptionally high and FDI

65、 flows can be very volatile.Quarterly data from Q1 2016 are shown in the chart below.Investment slowed markedly following Q1 2020,though remained positive in every quarter-a net inflow of 20.6 billion in Q1 fell by 95%in cash terms to 1.1 billion in Q2,increasing slightly in Q3,before falling to 0.7

66、 billion in Q4.2021 saw two quarters of positive growth and two quarters of net disinvestment;the first quarter of 2022 also saw a net disinvestment.This is broadly in line with global trends the impact of the Coronavirus pandemic saw global FDI inflows fall 35%in 2020 compared to 2019.15 15 See UNC

67、TAD,Investment Trends Monitor,27 October 2020 Source:UNCTAD,Bilateral FDI database UK rank in stock of world inward FDI,1990-20211=most inward FDI that year;based on US$data12345619901993199619992002200520082011201420172020Foreign Direct Investment Statistics 16 Commons Library Research Briefing,20

68、June 2023 A 2019 Economist article suggests that the UK remained attractive to foreign investors,owing to“low corporation tax and a stable legal system”in spite of Brexit related uncertainty;a counter argument suggests post-referendum FDI has been“little more than asset-stripping”,with foreign inves

69、tors taking advantage of the weakened pound to acquire British companies cheaply.16 2.7 EY,attractiveness surveys EY(formerly Ernst and Young)publish an annual“attractiveness survey”of foreign investors investments in the UK and their perceptions of it as a destination for investment.The 2022 UK Att

70、ractiveness Survey Adapting to a Changed World reported the UKs number of inward investment projects increased in 2021 compared to 2020,but remained below 2019 levels,as covid related restrictions continued to affect inward investment.The UKs market share of European inward investment projects was 1

71、7%,its second-lowest level over the last ten years,down from the all-time high of 21%of projects attracted in 2015,with the report stating that“it does appear the UK has now settled at a lower level of the European market.”The UKs share of inward investment projects has stabilised after“falling shar

72、ply following the 2016 vote for Brexit”,with the 21%of projects attracted in 2015“representing the high-water mark.”Some notable findings included in the 2022 report include:16 The Economist,How is Brexit affecting FDI into Britain?11 May 2019 Source:ONS,Balance of Payments FDI inflows into the UK b

73、illions,Q1 2016-Q4 2022-40-200204060801002016201720182019202020212022Foreign Direct Investment Statistics 17 Commons Library Research Briefing,20 June 2023 58%of investors surveyed planned to invest in the UK in the next 12months,up from 41%in 2020.The report points out that the investmentsurvey coi

74、ncided with the Russian invasion of Ukraine and that this wouldlikely colour future investment plans.Investors longer-term sentiments on inward investment plans for the UKwere“strong”,signalling“investors have moved on from Brexit.”There has been a sectoral shift in inward investment,with investment

75、 inmanufacturing projects up while investments in service sector projectsfell,a trend reflective of“pandemic-induced changes,such as the shift tohybrid and remote working reducing the need for physical presence inkey service sectors such as digital and business services.”60,372 jobs were created fro

76、m FDI projects in 2021,the highest level inthe past decade.London remained the UKs largest destination for inward investmentprojects,despite falls in its overall share of the UKs number of inwardinvestment projects.In 2021,London accounted for 39.7%of the UKsinward investment projects,roughly the sa

77、me as in 2020,though almost10 percentage points lower than in 2019.Despite this fall,London remained the leading European city for inwardFDI projects,with 394 projects in 2021,over two and a half times greaterthan the number secured by Madrid(140)and Paris(133).The 2023 survey Navigating through tur

78、bulence,published in June 2023 reported that despite a“continuing strong performance”the UK“still has work to do on international perceptions,addressing some of the fallout from recent political and economic turmoil”and that“Brexit continues to present hurdles to certain types of investment,especial

79、ly those relying on access to the European Single Market.”The report also states that international competition for inward investment“will intensify”,owing to developments such as the“subsidy-heavy US Inflation Reduction Act”and that the UK government may lack“resources to match the incentives being

80、 offered elsewhere.”17 Notable findings in the 2023 report include:Total inward FDI projects to the UK fell by 6.4%in 2022,putting it secondplace in Europe,behind France.The UK also fell to third place in Europe for perceived attractiveness,behind Germany and France,with the report stating“Brexit ha

81、s reducedthe UKs relative attractiveness for some investors.”17 EY,Navigating through turbulence:EY UK Attractiveness Survey UK including Scotland spotlight,June 2023,p 2-3 Foreign Direct Investment Statistics 18 Commons Library Research Briefing,20 June 2023 Despite the fall in project numbers,the

82、UK secured the highest FDIrelated jobs total in Europe,at 46,779,ahead of Spain with 39,104 andFrance on 38,102.The USA remained the biggest investor in the UK,accounting for 23.9%ofall UK inward investments,though the USAs share of investment into theUK has been declining since 2019.India overtook

83、Germany as the second largest source of inwardinvestment projects,accounting for 8.8%of the total,with the UKsecuring 58.2%of Indian investment projects in Europe in 2022.London retained it is status as the UKs largest destination for inwardinvestment projects,despite sharp falls in the number of in

84、wardinvestment projects secured compared to 2021.Londons share of UKprojects fell to a ten year low of 32.2%.Scotland secured the second highest number of projects in 2022,whileManchester and Edinburgh were the most successful cities outsideLondon in securing inward investment projects.Foreign Direc

85、t Investment Statistics 19 Commons Library Research Briefing,20 June 2023 3 UK investment abroad 3.1 FDI outflows,2021 In 2021:The UK investment flows abroad were worth 61.7 billion,up from-74.8billion in 2020.18By individual country,the UKs highest overall investment was in theUSA this amounted to

86、49 billion,followed by the UK Offshore Islands,with investment of 13.1 billion.19Overall,the UK recorded a net disinvestment with EU countries of 10.2billion,though a positive net investment in Europe as a whole of 6.3billion(the deficit was largely made up by investment flows to the UKOffshore Isla

87、nds).UKs outward FDI flows to the USA reached their highest level since 2017.18 The UK previously recorded a net disinvestment abroad for three successive years between 2014 and 2016 19 This grouping is made up of the Channel Islands and Isle of Man Source:ONS,Foreign direct investment involving UK

88、companies:2021,January 2023 billions%totalUSA49.079.4%UK Offshore Islands13.121.2%Finland6.09.6%Ireland4.57.2%Hong Kong3.75.9%Australia3.25.2%Canada3.15.1%South Africa2.43.9%Switzerland2.13.4%India2.03.2%World61.7100.0%UK outward FDI flows2021Foreign Direct Investment Statistics 20 Commons Library R

89、esearch Briefing,20 June 2023 3.2 Recent trends in FDI outflows In 2021,the value of the UKs outward FDI flows reached highest level since 2017.Over the last ten years,the UK has recorded four years of negative investment flows abroad(2014-16 and 2020).Between 1990 and 2021,the UKs position in terms

90、 of world outward FDI flows fluctuated between 1st in(2000)and 18th(in 2012);net disinvestments meant the UK was ranked 217th between 2014-16 and 216th in 2020.The United States has ranked first in all but three years over this period 1990(when Japan was first),2000(when the UK was first),2005(when

91、the Netherlands was first)and 2018 and 2019(when Japan was first).20 3.3 Outward FDI stocks,2021 In 2021:The value of the UKs outward investment position abroad(i.e.,the stockof UK FDI invested abroad)was 1.8 trillion,up very slightly from 2020.UK investments in EU countries accounted for 40.4%of th

92、e total stock ofUK investments abroad,up very slightly from 40.1%in 2020,thoughdown from a high of 47.0%in 2012.Europe as a whole(i.e.,including European countries outside the EU)accounted for 50.0%of UKs stock of investment abroad.20 Data from UNCTAD Source:ONS,Foreign direct investment involving U

93、K companies:2021,January 2023 UK net FDI flows abroad billions,2012-2021-150-100-500501001502012201320142015201620172018201920202021Foreign Direct Investment Statistics 21 Commons Library Research Briefing,20 June 2023 Looking at individual countries,the USA accounted for just over a quarterof UKs s

94、tock of investment abroad in 2021.3.4 Recent trends in outward FDI stocks The chart below shows the UKs world ranking in terms of the stock of FDI held abroad since 1990.Over this period,the UKs position in the world has Source:ONS,Foreign direct investment involving UK companies:2021,January 2023 S

95、ource:ONS,Foreign direct investment involving UK companies:2021,January 2023 billions%totalUSA461.426.1%Netherlands155.28.8%Luxembourg127.27.2%Spain95.95.4%France91.65.2%UK Offshore Islands83.94.7%Hong Kong77.64.4%Irish Republic70.24.0%Switzerland52.22.9%Australia41.02.3%EU714.040.4%Non-EU1,055.359.

96、6%World1,769.3100.0%Stock of UK investment abroad 2021Stock of UK investment abroad%total,202150.0%40.4%34.0%10.2%9.7%3.3%2.5%0%10%20%30%40%50%60%EuropeEUAmericasAsiaEurope,non-EUAust.&OceaniaAfricaForeign Direct Investment Statistics 22 Commons Library Research Briefing,20 June 2023 fluctuated betw

97、een fifth and second,while the United States has ranked first every year.The UK was the second largest holder of FDI stock abroad between 2000 and 2013,before falling to third in 2014 and 2017(behind the USA and the Netherlands)and to fourth between 2018 and 2020(behind the USA,Netherlands and China

98、)and fifth in 2021(behind the USA,Netherlands China and Canada).Source:UNCTAD,Bilateral FDI database UK rank in stock of outward FDI,1990-20211=largest FDI stock;based on US$data12345619901993199619992002200520082011201420172020Foreign Direct Investment Statistics 23 Commons Library Research Briefin

99、g,20 June 2023 4 World FDI This section looks at recent trends in world FDI.4.1 Flows In 2020,inward investment flows fell to their lowest level since 2005(in cash terms)-world flows of inward FDI fell by 35%to$1.0 trillion,down from$1.5 trillion in 2019.This followed three consecutive years of rela

100、tive stability in inward investment levels between 2017 and 2019,after a record high of$2.1 trillion in 2015.This fall in inward investment flows was due to Covid-19 pandemic and related lockdowns,which slowed existing investment activity,while prospects of a future recession had a negative influenc

101、e on new investment activity.The fall was more pronounced in investment flows to developed economies the value of inward flows in developed economies fell by 58%in cash terms between 2019 and 2020,while the value of inward investment flows to developing economies fell by 10%.Developing economies acc

102、ounted for two thirds of global FDI in 2020,up from just under half in 2019.The relatively small overall fall in investment in developing countries was attributed by UNCTAD to“resilient flows in Asia”,owing to the relatively successful containment of the coronavirus pandemic in East Asia,meaning inv

103、estment in the region remained stable.21 Mainland China saw the value of its inward FDI flows increase by 6%between 2019 and 2020,while the value of Hong Kongs inward FDI flows grew by 85%in cash terms,from$73 billion to$135 billion.In flows in Europe fell by 80%,while in flows in the EU fell by 48%

104、.The change in inflows to North America was less pronounced inflows to the USA fell by 33%,while inflows to North America as a whole fell by 40%.Despite this fall,the USA remained the largest host country for inward FDI in 2020,with inflows worth$151 billion.21 UNCTAD,Investing in Sustainable Recove

105、ry:World Investment Report 2021,June 2021 Foreign Direct Investment Statistics 24 Commons Library Research Briefing,20 June 2023 The value of world inward flows rebounded in 2021,reaching$1.6 trillion,an increase of 64%in cash terms compared to 2020 and an increase of 7%compared to 2019.Although inv

106、estment flows to developing countries grew by 134%in cash terms between 2020 and 2021,they remained below 2019 levels.By contrast,investment flows to developing economies were 17%higher in 2021 compared to 2019.Developing economies accounted for 53%of world inflows in 2021.The increase in investment

107、 flows to developing economies was mostly generated by investment flows to developing Asian economies,with investment flows to developing Asian economies reaching all-time high for the third consecutive year,combined with a partial recovery in investment flows to Latin America and the Caribbean,and

108、an upswing in investment flows to Africa.22 Flows to least developed countries also grew,though these countries accounted for a very small percentage of the growth experienced by developing economies.Projections from the United Nations Conference on Trade and Development(UNCTAD)for 2022 suggest inve

109、stment flows will likely see a“downward trajectory,at best remaining flat”owing to the conflict in Ukraine,combined with“lingering effects of the pandemic”causing a“triple food,fuel and finance crisis in many countries”,leading to investor uncertainty.23 In 2021,the USA maintained its position as th

110、e worlds largest recipient of inward FDI flows,accounting for just under a quarter of world inward 22 United Nations Conference on Trade and Development,World Investment Report 2022,June 2022,p xi 23 United Nations Conference on Trade and Development,World Investment Report 2022,June 2022,p xi Sourc

111、e:UNCTAD,Bilateral FDI database World inward FDI flows$trillions,1990-20210.00.51.01.52.02.51990199520002005201020152020WorldDeveloped economiesDeveloping economiesForeign Direct Investment Statistics 25 Commons Library Research Briefing,20 June 2023 investment flows.The value of the USAs inward flo

112、ws grew by 144%between 2020 and 2021,reaching$367 billion,their highest level since 2016.Mainland China accounted for 11%of world inward investment flows,down from 16%in 2020.In terms of outward FDI flows,the USA accounted for just under a quarter of world outward FDI flows in 2021.China accounted f

113、or 9%of world outward flows,down from 20%in 2020.Source:UNCTAD,Bilateral FDI database Source:UNCTAD,Bilateral FDI database World inward FDI flows%total,20210%5%10%15%20%25%World outward FDI flows%total,20210%5%10%15%20%25%Foreign Direct Investment Statistics 26 Commons Library Research Briefing,20 J

114、une 2023 4.2 Stocks The USA remained the country with the largest amount of inward FDI stock in 2020,accounting for 30%of the worlds total.In cash terms,the value of the USAs stock of inward investment increased by 26%between 2020 and 2021,reaching a record high of$13.6 trillion.The USA also remaine

115、d the worlds single largest holder of outward FDI stock in 2021,accounting for just under a quarter of the worlds total in 2021.Source:UNCTAD,Bilateral FDI database Source:UNCTAD,Bilateral FDI database World inward FDI stock%total,20210%5%10%15%20%25%30%35%World outward FDI stock%total,20210%5%10%15

116、%20%25%The House of Commons Library is a research and information service based in the UK Parliament.Our impartial analysis,statistical research and resources help MPs and their staff scrutinise legislation,develop policy,and support constituents.Our published material is available to everyone on commonslibrary.parliament.uk.Get our latest research delivered straight to your inbox.Subscribe at commonslibrary.parliament.uk/subscribe or scan the code below:commonslibrary.parliament.uk commonslibrary