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US foreign investment jumps to $252bn

US foreign investment jumps to $252bn
By Christopher Swann in Washington
Published: June 23 2005 17:07 / Last updated: June 23 2005 17:07

US companies almost doubled their overseas investment in 2004, with foreign direct investment outflows jumping to $252bn from $141bn the previous year.

Figures from the Organisation for Economic Co-operation and Development, the group representing the world's most industrialised nations, showed that China continued to be a magnet for investors while France and Germany lost their appeal.

Although US companies were aggressive buyers of foreign assets, there was no sign that the US was becoming less popular as an investment destination. Direct investment into the US climbed from $67bn to $107bn in 2004.

Mark Zandi, chief strategist at Economy.com, a consultant group, said the data showed US companies were spending record cash hoards mainly on Asian investments. “US companies are attracted to Asia partly because the currencies remain competitive, but also as low cost bases for production destination and as growing markets in their own right,” he said. “Europe is almost a mirror image of this.”

Inward investment into Germany and France, the largest economies on continental Europe, fell sharply last year. In France, inward investment almost halved from $43bn to $24bn. In Germany, foreign investors actually withdrew $39bn, having invested $27bn in 2003.

Wealthy countries overall stepped up investment in developing economies with overall OECD outflows climbing from $593bn to $668bn in 2004.

George Magnus senior economic adviser to UBS, the investment bank said: “Globalisation has been accelerating.

“Companies in rich nations are investing heavily in less advanced economies.”

China was the largest recipient of direct investment in developing countries, with a record inflow of $55bn up from $47bn in 2003.


LINK: http://news.ft.com/cms/s/7f43df94-e3ff-11d9-a754-00000e2511c8.html