Our first investment guide targets Japan in-house counsel
The UN Conference on Trade and Development’s (UNCTAD) estimates on global trade and foreign direct investment (FDI) make for a telling tale. Data for 2020 indicate an 8% decline in trade growth, with the second quarter of 2020 showing a more than 20% year-on-year decline. The UN agency reports that global FDI in 2020 collapsed 42% year on year to an estimated US$859 billion compared with the US$1.5 trillion the previous year.
While the sharp declines in these numbers are almost exclusively due to the pandemic, UNCTAD reckons the “effects will linger” in 2021, too, but hopes that the figures will go back to 2019 levels. However, the silver lining in all these gloomy statistics has been the resilience of the East Asian countries, both in foreign investment and trade. As the UN agency notes: “While no developing country or region has been spared from the decline in international trade during 2020, trade trends for the East Asian region are generally better. This trend is even more evident for Q3 2020, as East Asian exports turned positive on a year-over-year basis.”
Even with global FDI, it was Japan, the world’s largest outbound investor for three years running, that helped prop up the numbers. With about US$100 billion in outbound FDI for the first three quarters of the year, according to Bank of Japan data, Japan remained the biggest international investor, though a massive decline from the US$227 billion it invested in 2019.