(Yicai Global) Oct. 28 -- Global foreign direct investment, a measure of globalization and economic confidence, nearly halved in the first half from the same period last year due to the strangling of the world economy by the Covid-19 pandemic, but China bucked the trend, according to a new report by the United Nations’ trade and development organization.

FDI flows, which include cross-border mergers and acquisitions, international project finance and corporate investment abroad, into developed economies saw the biggest fall, plunging 75 percent in the six months ended June 30 from a year earlier to USD98 billion, according to the United Nations Conference on Trade and Development’s latest Global Investment Trends Monitor released yesterday.

However, FDI flows to developing economies were more resilient than expected, sinking just 16 percent, mainly thanks to China’s continued draw, said James Zhan, UNCTAD’s investment and enterprise director.

China’s foreign capital inflows remained relatively stable in the first half at USD76 billion, the report said. This helped pull up the whole Asia region to a drop of 12 percent. Other parts of the developing world saw falls of 28 percent in Africa and 25 percent in Latin America and the Caribbean.

“Overall investment flows into China remain at a high level and this is partly because China was one of very few countries, among the first, to control the pandemic and to resume its production system in the country.

“The Chinese government put in place effective measures to retain investment, to service operations of the multinationals operating in the country, and also put in place new measures to attract investment,” Zhan said.

Prospects for the full year are declines of between 30 and 40 percent, the report added. Recovery will depend on the duration of the pandemic and the effectiveness of the measures taken by countries to intercept it.

“The outlook remains highly uncertain,” Zhan said.

Editor: Kim Taylor