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China dominates foreign direct investment growth

Chinese investment in overseas countries is growing at a rate that outstrips all other countries, according to the annual Financial Times' 2015 fDi report08 Jun 2015

China invested $64 billion in greenfield projects overseas in 2014, more than three times as much as it had in in 2013. Much of this was in the US, which attracted $9bn in capital investment from China, a rise of 200% on the year before.

The main sectors for this foreign direct investment (FDI) in the US were real estate, paper, printing and packaging, chemicals, hotels and tourism, and software and IT services, according to the report.

China was also the leading 'destination country' in Asia-Pacific, with a 9% increase in capital investment into China from other countries, the report said.

The Asia-Pacific region was the leading destination for foreign investment in 2014, with 4,153 projects announced and estimated capital investment amounting to $250bn.

Outside China, however, 2014 was not a good year for foreign investment, which fell by 1% internationally with the only growth, of 1%, recorded in greenfield capital investment, the report said.

"This time last year, we had some modestly good news to share," said fDi magazine editor Courtney Fingar in her introduction to the report. "There were strong signs that the FDI market was rebounding from the doldrums of the previous few years, and we recorded an 11% increase in capital expenditure on greenfield projects. After years of depressing conference attendees with all the downward-pointing graphs that we presented, it was nice to have some positive news to share. But unfortunately, it seems, the tough times are back." Countries in western Europe invested more overseas than those in any other region, but in 6% fewer projects than in 2013, while the value of these rose by 1%, the report said. The UK remained the leading European investor by number of projects, although that number fell by 13% in 2014, it said.

The amount invested overseas from North America increased by 9% to $142 bn.

By sector, real estate was the main beneficiary of FDI last year. According to the report, $81bn of all FDI projects announced in 2014 were in the real estate sector, where project numbers rose by 48%. Coal, oil and natural gas projects saw $79bn worth of FDI, whilst FDI investment in communications hit $59bn, the Financial Times said.