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Jun. 2 – China and India have emerged as the preferred route for foreign investment as the world continues to recover from the Global Financial Crisis, a new report from Ernst & Young states.
The report, released today, ranked China as the most attractive foreign direct investment destination for 2010, edging ahead of Western Europe, in the survey of 814 companies.
India tied with North America in fourth after Central and Eastern Europe in third. Both China and India’s rankings improved on 2009’s survey, when companies were more adverse to risk.
“In 2010 investors look at a forecast global growth of 4 percent, see that only 1 percent is likely in Europe and turn their eyes to high-growth markets,” the report said.
China is an important growth area for European MNCs like Siemens and Peugeot, while French retailer Carrefour is already pushing to enter India this year.
More than half of the survey’s respondents said they had no plans to invest in Europe, unchanged from 2009. Nearly 85 percent of those polled already operate in Europe.
The downturn resulted in a fall in new foreign investment projects in Europe by 11 percent in 2009. Though there are indications that a fourth quarter gain could mean a better forecast for 2010 the report said.
China saw a 2.6 percent drop in FDI in 2009, bringing US$90 billion as investors looked to consolidate cash reserves and bolster savings. With the economy on the mend and Europe in continued financial trouble, FDI into China will see renewed growth in the coming year according to the report.
