Vietnam ranks among top 20 economies for FDI attraction

VOV.VN - Vietnam has recently entered the top 20 countries globally in terms of foreign direct investment (FDI) attraction after recording US$16 billion last year, as stated within the World Investment Report 2021 released by the UN Conference on Trade and Development (UNCTAD).

According to the report, the United States took the lead in terms of attracting foreign direct investment (FDI) last year with US$156 billion, followed by China with US$149 billion, Hong Kong (China) with US$149 billion, Singapore with US$94 billion, and India with US$64 billion.

The country secured 19th position in the overall ranking of FDI attraction last year with US$16 billion, rising five places compared to 2019.

Global FDI flows fell by 35% in 2020 to US$1 trillion, a drop from US$1.5 trillion seen during the previous year. This can largely be attributed to lockdowns being implemented around the world in response to the COVID-19 pandemic slowing down existing investment projects, whilst the prospects of a recession led multinational enterprises (MNEs) has led to the reassessment of new projects.

The drop largely impacted developed economies, with FDI falling by 58%, partially due to corporate restructuring and intrafirm financial flows.

In terms of developing economies, FDI decreased by a more moderate 8%, mainly due to the resilient flows in Asia. As a result, developing economies made up two thirds of global FDI, an increase from just under half in 2019.

The overall contraction in terms of new project activity, combined with a slowdown in cross-border mergers and acquisitions (M&As), caused a significant drop in equity investment flows of more than 50%.

This fall in FDI flows across developing regions was uneven, at 45% in Latin America and the Caribbean, along with 16% in Africa. In contrast, flows to Asia rose by 4%, meaning that the region accounted for half of global FDI in 2020. Indeed, FDI to the transition economies plunged by 58%, whilst the pandemic further deteriorated FDI in structurally weak and vulnerable economies.

With a total FDI reaching US$16 billion, the country secured 19th position in the report, up five places compared to 2019 despite the negative impact of the COVID-19 pandemic.

According to details within the report, this marks the first time that the nation has entered the top 20 countries and territories in terms of attracting the most FDI.

Moving forward, the country is also believed to have plenty of room to compete with other major competitors, typically China, for FDI inflows thanks to the trend of global production shift.

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