Slumping Foreign Investment

This Economist article might be a little dense if you’re not, well, an economist, but it explains one component that fuels the American economy: Foreign Direct Investment.

The M&A [mergers and acquisitions] volatility has probably been felt most keenly in America and Britain, both traditional investment hot-spots. FDI [foreign direct investment] inflows declined sharply last year in America (down by 77%) and Britain (down by 60%). Foreign investment in both countries is a mere shadow of what it was at the peak three years ago—in America, FDI inflows last year were a mere tenth of the amount received in 2000; in Britain, about a fifth.

Trans-national regulations and global uncertainty are largely blamed for the slow-down that funnels hard cash into American business. Meanwhile, China is racing ahead in FDI, outpacing both America and Britain combined.