Is the United States now the world’s preferred overseas investment destination, finally beating out China? President Obama said so during his State of the Union address. As is usually the case when I hear the president speak, my first thought was: I wonder if that’s true?
In terms of foreign direct investment, the United States does indeed beat out China. But we beat them out before, too, so that’s nothing new. What is new is that China is in fact getting closer: While FDI rose last year in Germany and Japan, it declined in the United States, according to the U.N. Conference on Trade and Development’s annual report: “FDI flows to the United States failed to reverse their decline, contrary to other signs of economic recovery over the past year,” with China “closing the gap with the United States to some US$32 billion.” Indeed, 2013 was not America’s year, or Europe’s year — more than half of all overseas investment went to developing countries.
Perhaps the president had some private set of figures he was consulting. I’d be curious to know what they were, assuming his speechwriters aren’t just making stuff up.