Foreign Direct Investment (FD) is an important part of starting budding businesses and feeding expanding businesses. It is something the U.S. should strive to achieve as it often influences not only inflow of resources but also intellectual capital and future new products/services (intellectual and financial resources work off of each other). As a mechanism and indicator of future wealth and growth it is those with an influence of FDI that will grow (That means jobs and tax resources).
The United Nations Conference on Trade and Development (UNCTAD) recently published findings indicating that China received $163 in FDI and the U.S. received $134 billion (UNCTAD, 2021). The U.S. lost about half and China and India increased. This change means were are not nimble and not prepared yet to corner new world markets without adjusting how we approach the global economy.
China's economy improves during the pandemic with a 2.3% GDP improvement during 2020 (He, 2021). (I didn't see any numbers on the U.S. yet). What is interesting about this change is that an initial contraction was boosted significantly in the 4th quarter to a whopping 6.5%. Economists also noticed that industrial manufacturing also bumped up 7.3% in 4th quarter indicating growing market appeal.
While the video below is a marketing piece for Chinese investments you kind of get the point that the U.S. has for a long time not stepped up to the investment game and have been overusing old tools that don't seem to manage the economic system well. Some of this problem could be a result of limited perspectives and the limited movement of new intellectuals into the central circles (one of the risks of elitism...and that is not knocking anyone!).
Without new ideas and new ways of viewing the economic system we will be stuck with old ways of thinking. As history has shown us over the past decade (probably 2) that our tools are not as effective as they once were. This FDI indicates there was some change in the economic system and we are not able to envision that change well and have some difficulty finding an appropriate course.
All entities (whether business or governmental) need new people, new ideas, and new ways of looking at the world. Without new ideas you don't have change. One way to create innovative thinking is to have a mix of 30-40% new people that can create new ideas and 60%-70% experienced administrators that know how to make things function in the "real world" (Could be adjusted. Too many new ideas that can't be processed or vetted may lead to team ineffectiveness.).
We can continue to dump money into an older system or jump two feet forward into the digital economy. There is a risk to doing nothing and risks to doing something. The only thing we can say is we are not up to full competitive position yet (as seen in the numbers). We are in COVID exiting stage (hopefully) and we may want to use this opportunity to powerup and build up the fundamentals of our economy.
He, L. (January 18th, 2021). China's economy grows 2.3% in 2020 as recovery quickens. CNN. Retreived https://www.cnn.com/2021/01/17/economy/china-gdp-2020-intl-hnk/index.html
UNCTAD (January 24th, 2021). Investment Trends Monitor. Retrieved https://unctad.org/system/files/official-document/diaeiainf2021d1_en.pdf
UNCTAD Foreign Direct Investment 2020 Totals by Dr. Murad Abel on Scribd
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