Economic perspective: The vane of foreign direct investment

Shing the recent data from the United Nations Trade and Development Organization show that FDI, attracted by developing economies in the 2010, surpassed the developed economies for the first time in the past, accounting for 53%.　　The figures once again show the allure of developing economies. Indeed, since 2008, the debt crisis from the United States to Europe has exacerbated the shift in the flow of foreign capital between the two classes of economies.　　Although the total amount of FDI flows to developing countries last year was significantly lower than the 2008 highs, or even less than 2009, the structural changes in its flow are instructive for judging the regional performance of the future global economic recovery. This structural change is largely due to the weakening of the charm of developed economies. The continued depreciation of the dollar and the recession have led to a downward trend in foreign direct investment in the United States over the past 10 years. While U.S. data rebounded strongly last year, continuing to hold the top spot for foreign direct investment inflows, temporary changes cannot reverse the overall trend change. The short-term performance of the United States, in addition to benefiting from its own economic recovery, is linked to last year's slump and the risk aversion it brings. After all, there is a competitive relationship between the currencies of the two big economies and many industrial capitals. In the past two years, the amount of foreign direct investment attracted by Europe has accelerated.　　Until there is no escaping internal or external debt troubles, the prospects for the entire developed economies to attract industrial capital inflows are grim. In contrast, developing economies, mainly in East Asia and Latin America, have shown a strong focus on absorbing foreign direct investment. China's 100 billion trillion dollars in attracting foreign direct investment in 2010 has once again demonstrated China's economic dynamism in the midst of adversity.　　This will help to dispel doubts about whether the Chinese economy can withstand the impact of external headwinds and continue to thrive. In addition to the economic dynamism of developing economies, monetary easing in Europe and the United States and devaluation of currencies have provided a certain impetus on the other side. As a result, FDI inflows into developing economies are short-lived, and the possibility of hot money speculation still cannot be ruled out. In the long run, since the 90 's, the development of the foreign investment of developing economies has shown an accelerated upward trend, its national wealth and the accumulation of economic power can be seen. However, these funds also face major hurdles in entering some industries in advanced economies, especially in high-end industries.　　Such factors also inhibit the rational flow of foreign direct investment between the two major categories of economies. The global economic recovery is beginning to show, with the bellwether of foreign direct investment pointing to more economically active developing economies. Although speculative factors may interfere in the short term, it is the natural result of the global economic geography adjustment and the profit-driven international industrial capital. From this perspective, international industrial capital investment will also bring about the corresponding interregional output, trade and income structure changes. Developing countries will likely continue to benefit from the rational use of these foreign capital, narrowing the economic gap with developed countries.