Annual direct investment by developing countries into other rising economies has grown faster than that by developed countries in the past 15 years, reflecting the recognition by companies that in a globalizing world economy it is important to have a portfolio of locational assets in order to be competitive, the United Nations Conference on Trade and Development (UNCTAD) said Tuesday.
Pointing to Chinas Hong Kong – which now has a larger outward foreign direct investment (FDI) position than Sweden – as an example of the phenomenon, UNCTAD said: – Its transnational corporations (TNCs) – along with those from Singapore, the Republic of Korea, Mexico and, more recently, South Africa – figure prominently among the developing worlds TNCs.
Ranking FDI by developing continents, UNCTAD said Asia, led by the south, east and southeast, was by far the largest outward investor in the developing world, followed by Latin America.
UNCTAD said overall, it was predicting that the share of developing countries in outward FDI could be expected to rise as developing-country businesses become more competitive and their governments allow or even encourage outward FDI, thereby strengthening the “emerging new geography of investment.”
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