United States - Foreign investment



From the end of World War II through 1952, US government transfers of capital abroad averaged about $5,470 million annually, while private investments averaged roughly $730 million. Portfolio investment represented less than $150 million a year, or only 2.5% of the annual aggregate.

After 1952, however, direct private investment began to increase and portfolio investment rose markedly. In the late 1950s, new private direct investment was increasing yearly by $2 billion or more, while private portfolio investment and official US government loans were climbing by a minimum annual amount of $1 billion each. During the 1960–73 period, the value of US-held assets abroad increased by nearly 12% annually. From the mid-1970s through the early 1980s, it rose most years by at least 15%, and doubled between 1980 and 1990. Direct investments abroad had a book value of $711.6 billion in 1995, over half of which was invested in Europe, with the single greatest concentration ($119.9 billion) in the United Kingdom. Asia and the Pacific Islands had the 2d-largest regional total ($126 billion), with Japan ($39 billion) the leading country.

Foreign direct investment in the United States has risen rapidly, from $6.9 billion in 1960 to $27.7 billion in 1975 and $183 billion at the end of 1985. As of 1995 foreign direct investment in the United States was valued at $560 billion, of which $363.5 billion originated in Europe ($119.9 billion in the United Kingdom). Asia and the Pacific was the other major source of foreign direct investment, of which close to 90% ($108.6 billion) came from Japan. Total foreign assets in 1994 (current cost) were over $3.16 trillion. Over one-third of the investment volume was in manufacturing. In 1998 foreign direct investment reached $174.4 billion, up from $103.4 billion in 1997, and then increased to $283 billion in 1999. Foreign direct investment inflow into the United States peaked at a world record of $301 billion in 2000. In the global economic slowdown of 2001, foreign direct investment inflows dropped to $124.4 billion. The worldwide decline in foreign investment after the 11 September 2001 terrorist attacks was most dramatic in the United States. In 2002, estimated foreign direct investment inflow dropped more than 64% to an estimated $52.6 billion in 2002.

US outward foreign direct investment in 2002 totaled $109 billion, with the largest recipients being, in order, the United Kingdom, the Netherlands, and Canada.

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