China surpassed the U.S. as the top destination for new foreign direct investments last year as the coronavirus pandemic continued to weigh heavily on the American economy.
New investments in U.S. businesses by foreigners plummeted by nearly half in 2020, falling by 49 percent during the pandemic, according to United Nations data released on Sunday.
Meanwhile, direct foreign investments to China climbed four percent, bumping America from the top spot the world’s largest economy occupied for decades and boosting China from second to first place.
China attracted $163 billion in new foreign investments last year, while the U.S. received only $134 billion, a report from the UN Conference on Trade and Development showed.
Although new investments in the U.S. sank over the turbulent course of 2020, America still ranks first as far as total foreign investments.
Economists say the imbalance in new investments from other countries is a sign of the shifting center of the global economy, which has moved towards China in recent years.
The best year for foreign investment in the U.S. was 2016, when America attracted $472 billion. China received $134 billion that year. In the years since, new foreign investment has trended upward in China and downward in the U.S.
China’s economy has also been growing, according to data from the Chinese government. China’s gross domestic product increased 2.3 percent last year, making the world’s second largest economy the only country not to suffer a contraction as the pandemic, which originated in the Chinese city of Wuhan, hobbled economies across the globe.
Meanwhile, the U.S. has been locked in trade battles with the Chinese Communist Party for the last several years under the Trump administration. China signed a trade deal with the U.S. in January of last year, but since the pandemic, the trade deficit between the two countries has spiked.
After the Wuhan outbreak, Chinese authorities controlled the spread of the coronavirus within its borders by imposing stringent lockdown measures. The city of Wuhan was effectively inaccessible to the rest of the country from January to June.