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Foreign direct investment trends and outlook in Asia and The Pacific 2020/2021

Globally, both FDI inflows and outflows started to recover in 2019, with the former growing 30% to $1.5 billion and the latter increasing by 33% to $1.3 billion. However, the COVID-19 pandemic has caused global FDI flows to drop by 49% in the first two quarters of 2020 compared to the same period in 2019. Asia-Pacific’s share in global FDI inflows dropped from 45% in 2018 to 35% in 2019, and its share in global FDI outflows decelerated from 52% to 41%. Nonetheless, the region remained the largest source of global outflows for the second year running. In 2019, China and Hong Kong, China were the largest FDI recipients attracting 38% of total FDI inflows to the region. Japan was the largest source of investment from the region in 2019, responsible for 42% of regional outward FDI. The COVID-19 pandemic has accelerated the downward trend already recorded in recent years in greenfield FDI with the value of announced inbound greenfield investment projects from January to August 2020 dropping by 40% from the average over the same period in 2019. Likewise, outbound greenfield investment project values declined 48% over the same period in 2019.

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