West Loses Appeal for FDI: Wall Street Journal

Populist rhetoric, heightened security reviews and global tensions contribute to reduced foreign investment in the West, report Tom Fairless and Paul Hannon for the Wall Street Journal. Foreign investment in the United States fell by 9 percent and 30 percent in Germany. The writers point out that FDI data is volatile, easily distorted by a small number of large transactions. Still, UN statistics show that security concerns blocked $150 billion in cross-border investments. Labor costs and regulations also influence FDI decisions. To maintain economic growth, central banks in the United States and Europe may pull back from lifting interest rates and encourage credit. Meanwhile, FDI is on the rise in Vietnam, Thailand, Bangladesh, India, Singapore and Indonesia, assisted by the US-China trade war. Investments in the emerging economies may not last though, because the trade war could end at any time or the United States could target other nations besides China with tariffs. – YaleGlobal