US Greenfield FDI Continues to Shrink, ITIF Says
The U.S. is increasingly struggling to attract greenfield foreign direct investment, which has fallen by more than 90% since the 1990s, the Information Technology & Innovation Foundation said in a July report. ITIF, citing data recently released by the U.S. Bureau of Economic Analysis, said foreign companies appear to be less willing to build new facilities or expand existing ones in the U.S.
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The group said the drop in FDI from China is “especially pronounced” -- Chinese investment in the U.S. fell 84.8% between 2014 and 2021. Some of the drop can likely be attributed to increased scrutiny by the Committee on Foreign Investment in the U.S. and the passage of the Foreign Investment Risk Review Modernization Act, ITIF said (see 2104200056, 2101220034 and 2005110008).
The group called on Congress to address the issue of decreasing FDI or risk the U.S. ceasing to be a destination for investment. “[T]he fact remains that greenfield expenditures are only a marginal and decreasing part of total inward FDI, and they are plummeting both in total nominal value and relative to GDP and inward FDI in general,” ITIF said. “It is time for Congress to recognize this shortcoming and focus on dramatically increasing the United States’ attractiveness for greenfield investment.”