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Presidential Report on U.S. Inbound FDI Says America Remains "Attractive Destination for Investment"

07/01/2011
Evidence of high levels of inbound foreign direct investment (FDI), plus data gleaned from cross-country comparisons and company surveys reveal that the United States "has a very open investment climate and remains an attractive destination for investment," says a new report produced by the President's Council of Economic Advisors.

"Inbound foreign direct investment has long played an important role in the U.S. economy," note the authors. "Foreign companies with operations in the United States invest billions of dollars here. They employ millions of U.S. workers and offer higher-than-average levels of compensation. Their investments help to modernize the U.S. capital stock, and they are important contributors to the U.S. manufacturing sector."

In 2010, American inbound FDI "rebounded sharply" and increased 49 percent from its 2009 economic crisis level. In addition, the contributions of majority-owned American affiliates of foreign-domiciled businesses included:

  • production of $670 billion in goods and services, accounting for nearly 6 percent of total U.S. private output--over 42 percent of this is the U.S. manufacturing sector;

  • employment of 5.7 million U.S. workers (five percent of the U.S. private workforce, with two million people working in the U.S. manufacturing sector;

  • investment of $188 billion in capital expenditures, accounting for over 11 percent of total U.S. private capital investment;

  • investment of $40.5 billion in R&D, representing over 14 percent of total U.S. private R&D investment; and
  • exporting of over 18 percent of total U.S. merchandise exports.

The U.S. continues to receive the most FDI of any nation in the world, summed up the report, "helping to support millions of high-quality, well-paid American jobs."

Nearly 90 percent of the U.S. inbound FDI flows in 2010 came from companies domiciled in Canada, Europe, and Japan; and less than one percent from China. Interestingly, one survey of Chinese enterprises found the U.S. to be "the most desirable investment location of any major economy in the world."

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