China tops FDI confidence index of emerging markets

China topped the most recent Kearney's 2024 Foreign Direct Investment Confidence Index emerging market rankings and jumped from the seventh to the third spot in the world rankings.

The report examines investor perceptions of foreign direct investment flows over the next three years and deems that investors remain optimistic about the global economy.

Globally, 88 percent of respondents plan to increase FDI over the next three years, up 6 percent from last year, according to the report. As high as 89 percent of respondents believe that FDI will play a more important role in building their companies' profitability and competitiveness over the next three years.

The report noted that while investors generally still prefer developed markets as the main investment destination, two more emerging markets entered the top 25 investment destinations this year. China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland and Argentina round out the top eight, and are the only eight emerging markets in the global list.

The report also pointed out that although investors are more optimistic about overall FDI trends, they are cautious about increasing risks in the global operating environment. Eighty-five percent of respondents believe that rising geopolitical tensions will affect their investment decisions, with some companies choosing to invest in nearshore or friendshore markets as a result. In addition, investors predict that further tightening of business regulations in both developed and emerging markets may pose risks for investment in the coming year.