28 juni 2005

Trends in FDI (The Flemish Beerdrinker)

The latest OECD-report on foreign direct investment has some interesting facts and trends.

To begin with, it seems that the United States still is a very attractive place to invest in. In 2004 the U.S. regained the role as the worlds principle destination for direct investment. Lately we hear that financial inflows into the U.S. mostly comes from foreign central banks thus financing cheaply America’s twin deficits. But they seem to lose their appetite. Are private inflows picking up the tap? And will they continue to do so?

Another remarkable trend is the Chinese appetite for investing in Latin-America. In june 2004, public and private companies signed letters-of-intent to invest almost 20 billion dollars in Argentina’s transport, hydrocarbons, mining, construction, telecommunication and tourism sectors. It appears that selling companies still is a preferred policy for the Argentine government. Do we have here a Beijing-Consensus instead of the Washington one? And why is no one protesting this time? Is it all right for China to take over those companies but not for the U.S.?

Russia is experiencing a consumer boom, with rising household income and soaring consumer credits. Many foreign companies are trying to get an advantage in this new market (not good news for Old Europe?). It seems that Russians are getting rich enough to buy foreign cars in droves. And probably those cars are better for the environment than the Russian ones.

Finally, small countries spend lot’s of their R&D-budgets abroad to tap into the human capital and technology of other nations. So remember that when a company is moving (part of) it’s r&d abroad: this ain’t necessarily a bad thing.

This and much more, here.

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