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FDI to pick up this year

By Hu Meidong and Ding Xueping (China Daily)
Updated: 2010-03-06 10:33

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XIAMEN, Fujian province - Global foreign direct investment (FDI) flows are expected to stage a modest recovery this year, with mergers and acquisitions the major cause of the increase in global FDI in the following two or three years, said a top official of a UN agency.

Global FDI flows are expected to reach $1.2 to $1.4 trillion this year, and rebound to $1.7 trillion by 2012, the same as that in 2008, James Zhan, director of the Investment and Enterprise Division of the United Nations Conference on Trade and Development (UNCTAD), said at a media briefing for the World Investment Forum to be held in September.

"Direct investment related to environmental protection will increase, and many foreign companies in this field are now in need of funds and looking for a market," said Zhan, adding that Chinese companies could invest more in overseas companies of this kind.

Global foreign direct investment flows in 2009 plunged 38.7 percent from 2008 to an estimated $1.04 trillion due to the economic crisis, according to UNCTAD.

FDI flows to developed economies fell 41.2 percent, while those to developing countries dipped 34.7 percent, but China was the second largest country to attract FDI, following the US, said the report.