Despite a global surge in Chinese foreign direct investment during the first half of 2015, the United States remains the leading global financial power based on total foreign direct investment. During 2015, outward US net foreign direct investment (FDI) reached $345.1 billion, an amount that was not only 21.6 percent of total global financial flows but that was also almost twice the total FDI of China. Moreover, American foreign investment in 2015 was nearly five times its total value in 2005, providing a direct opportunity to increase US global influence. So, where in the world does the United States have the most influence, at least in terms of FDI?
One approach to answering this question is through examination of trends in the share of inward FDI stock from the US on a country-by-country basis. The IMF's Coordinated Direct Investment Survey dataset and the UN’s Bilateral FDI Statistics each provide FDI data by investment source and the recipient country. US influence through FDI is geographically lopsided and generally risk adverse, based on IMF data:
- The United States is especially powerful in the North Atlantic and Caribbean region, where it accounts for almost 70 percent of all foreign investment to the region. Aruba and Costa Rica are among the largest recipients.
- US FDI in the regions of North and Central America constitutes 15 and 13 percent of the total foreign investment stock in each country, respectively. Canada and Mexico receive roughly half of their FDI from neighboring USA.
- Australia, Japan, Luxembourg, the Netherlands, and the United Kingdom all receive their largest shares of FDI from US investors.
- American investors tend to avoid riskier regions, including Northern and Sub-Saharan Africa, as well as the Middle East and South Asia, which report the lowest share of investment from the United States.
Where US FDI is not, Chinese FDI is. The investment void the US has maintained in regions with riskier investment profiles has provided China with an opening to expand its influence.
- For example, American investors have maintained a 1 to 2 percent stake in Zambia's foreign investment stock since 2010, whereas Chinese capital in Zambia grew from 6.12 percent in 2010 to 9.33 percent in 2014.
- Niger now receives one third of its total FDI from China—with notable investments in Niger's energy sector, in particular—while US foreign investment in the country is nonexistent.