Introduction
The report aims to show the Foreign Direct Investment (FDI) trends of the G20 countries, with specific focus on the outward flow of their FDI. The G20 countries represent a significant portion of the global economy and play a crucial role in international investment flows. The report aims to offer insights into the FDI patterns of the G20 countries, with specific focus on the recipient States or destinations of the FDI from the G20 countries as well as the amount being invested by the G20 countries into these recipient economies.
The G20
The G20, or Group of Twenty, is an international forum for governments and central bank governors from 19 individual countries and the European Union (EU). The G20 was established in 1999 in response to the financial crises of the late 1990s, with the aim of bringing together major advanced and emerging economies to discuss and coordinate global economic policies.
The G20 countries represent a diverse group of economies that collectively account for a significant portion of the world’s population, GDP, and international trade. The member countries of the G20 include: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union. The EU member states include: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
The G20 holds annual summits where leaders discuss a wide range of global economic and financial issues, including trade, investment, climate change, development, and more. The forum provides a platform for these influential economies to collaborate, coordinate policies, and address pressing challenges that affect the global economy.
It’s important to note that the G20 is not a formal international organization like the United Nations. Instead, it operates as an informal forum for dialogue and cooperation among its member countries. The G20’s influence in shaping global economic policies and addressing global challenges underscores its significance in today’s interconnected world.
FDI
Foreign Direct Investment (FDI) refers to the investment made by individuals, companies, or governments from one country into businesses or assets located in another country. This investment typically involves a significant degree of ownership or control over the foreign entity. FDI can take various forms, such as acquiring shares in a foreign company, establishing new subsidiaries or branches in a foreign country, or participating in joint ventures with local businesses.
FDI is considered an important driver of economic growth and development for both the investing and the receiving countries. It can bring in capital, technology, management expertise, and access to new markets, which can contribute to job creation, increased production, and improved infrastructure in the host country. Additionally, it can enhance international trade and foster economic integration between countries.
FDI Flows measure the levels of investment on a net basis. FDI outflows, in this context, signify the investment made by a G20 country into foreign economies; and FDI inflows measure the investment made by foreign economies into a G20 country. For example, in the UK, inward flows would measure foreign companies’ investments in the UK, while outward flows would measure investments made by British companies abroad.
- FDI of Turkey
FDI inflow to Turkey
According to OECD International Direct Investment Statistics 2022, FDI inflow to Turkey in 2021 was as follows:
| Country | FDI inflow to Turkey in 2021 in Million US dollars |
| United Kingdom | 1 550.2 |
| US | 1 441.1 |
| Netherlands | 1 100.6 |
| UAE | 837.5 |
| Germany | 689.5 |
| Switzerland | 598.6 |
| South Korea | 475.9 |
| Luxembourg | 332.6 |
| China | 311.2 |
| Japan | 266.1 |
| Russia | 210.3 |
| Qatar* | 275.1 |
Source: OECD International Direct Investment Statistics 2022
*Non-G20 country.
According to Türkiye Cumhuriyet Merkez Bankası (2023), FDI inflow to Turkey in 2022 was as follows:
| Country | FDI inflow into Turkey in 2022
in Million USD |
| Germany | 23 120 |
| Netherlands | 23 010 |
| Russia | 13 704 |
| Luxembourg | 9 947 |
| Switzerland | 9 031 |
| United Kingdom | 8 847 |
| France | 7 688 |
| Iran* | 20 983 |
| Bahrain* | 15 793 |
| Afghanistan* | 18 862 |
| Tajikistan* | 10 910 |
Source: Türkiye Cumhuriyet Merkez Bankası (2023)
*Non-G20 country.
This data shows that of the G20 countries, the ones with the most inward flow of FDI into Turkey include: UK, US, Germany, Netherlands, Switzerland, Luxembourg, Russia, UAE, France and South Korea.
FDI outflow from Turkey
According to OECD International Direct Investment Statistics 2022, FDI outflow from Turkey in 2021 is as follows:
| Country | FDI outflow from Turkey in 2021 in Million US dollars |
| Netherlands | 1 437.8 |
| US | 1 296.8 |
| UK | 571.6 |
| UAE | 240.5 |
| Germany | 175.9 |
| Switzerland | 156.2 |
| Luxembourg | 154.7 |
| Spain | 67.3 |
| Romania | 61.7 |
| Sweden | 58.3 |
Source: OECD International Direct Investment Statistics 2022
According to Türkiye Cumhuriyet Merkez Bankası (2023), FDI outflow from Turkey in 2022 was as follows:
| Country | FDI inflow into Turkey in 2022
in Million USD |
| Netherlands | 21 239 |
| UK | 4 451 |
| Jersey* | 2 968 |
| Germany | 2 888 |
| US | 2 684 |
| Malta | 2 028 |
| Austria | 1 762 |
| Russia | 1 566 |
| Algeria* | 1 420 |
| Kazakhstan* | 1 007 |
| Luxembourg | 683 |
| Belgium | 657 |
| Sweden | 482 |
| Switzerland | 473 |
Source: Türkiye Cumhuriyet Merkez Bankası (2023)
*Non-G20 country.
This data shows that the G20 countries where Turkey is making most of its FDI are: Netherlands, UK, Germany, US, Switzerland, Sweden, Russia, Luxembourg and UAE.
- FDI of China
FDI outflow of China
According to Statista, FDI outward flow from China in 2021 is as follows:
| Country | FDI outflow from China in 2021 in Billion US dollars |
| Hong Kong* | 101.19 |
| British Virgin Islands* | 13.97 |
| Cayman Islands* | 10.75 |
| Singapore* | 8.41 |
| US | 5.58 |
| Indonesia | 4.37 |
| Germany | 2.71 |
| Vietnam* | 2.21 |
| Australia | 1.92 |
| UK | 1.9 |
| Switzerland | 1.82 |
Source: Statista (2023)
*Non-G20 country.
This data shows that the G20 countries where China is making most of its FDI are: United States, Indonesia, Germany, Australia, United Kingdom, and Switzerland.
- FDI of Germany
FDI outflow of Germany
According to Deutsche Bundesbank (2022), the amount of FDI outflow from Germany in 2021/2022 to the various countries is as follows:
| Country | FDI outflow from Germany in 2021/2022 in Billion Euros |
| US | 409 |
| Luxembourg | 109 |
| China | 103 |
| UK | 102 |
| France | 53 |
Source: Deutsche Bundesbank (2022)
According to OECD International Direct Investment Statistics 2022, FDI outflow from Germany in 2021 is as follows:
| Country | FDI outflow from Germany in 2021 in Million US dollars |
| US | 26 665.1 |
| Netherlands | 41 840.1 |
| Luxembourg | 20 071.0 |
| China | 4 864 |
| UK | 3 235.6 |
| France | 4 923.1 |
| Austria | 6 525.5 |
| Singapore* | 8 967.6 |
| Australia | 2 108.6 |
| Czech republic | 2 224.5 |
| Mexico | 2 485.8 |
| Poland | 2 355.7 |
| Spain | 2 919.8 |
Source: OECD International Direct Investment Statistics 2022
*Non-G20 country.
This data shows that the main destinations for Germany’s FDI include: United States, United Kingdom, France, China, Luxembourg, Netherlands, Austria, Australia and Czech Republic.
- FDI of Japan
FDI outflow of Japan
According to OECD International Direct Investment Statistics 2022, FDI outward flow from Japan in 2021 is as follows:
| Country | FDI outflow from Japan in 2021 in Million US dollars |
| US | 59 554.3 |
| UK | 18 751.7 |
| Singapore* | 15 609.2 |
| Luxembourg | 9 797.8 |
| China | 9 561.0 |
| Germany | 6 066.2 |
| Switzerland | 5 064.0 |
| Hong Kong* | 4 741.9 |
| India | 2 762.8 |
| Ireland | 1 432.3 |
| Vietnam* | 3 789.2 |
| Thailand* | 3 074.7 |
Source: OECD International Direct Investment Statistics 2022
*Non-G20 country.
According to Statista (2023), FDI outward flow from Japan in 2022 is as follows:
| Country | FDI outflow from Japan in 2022 in Billion Japanese Yen |
| US | 7 827 |
| Australia | 1 145.7 |
| China | 1 095.59 |
| Netherlands | 997.49 |
| Ireland | 902.47 |
| Thailand* | 775.65 |
| Singapore* | 703.47 |
| Cayman Islands* | 665.62 |
| Germany | 557.26 |
| Switzerland | 545.72 |
Source: Statista (2023)
*Non-G20 country.
This data shows that, of the G20 countries, the main destinations for Japan’s FDI include: United States, United Kingdom, China, Australia, Luxembourg, Germany, Switzerland, Netherlands, Ireland, and India.
Both the OECD International Direct Investment Statistics 2022 and Statista (2023) show that the United States was the leading destination receiving outward foreign direct investment (FDI) from Japan in 2021 and 2022, respectively.
- FDI of the United Kingdom
FDI outflow of UK
According to OECD International Direct Investment Statistics 2022, FDI outflow from UK in 2021 is as follows:
| Country | FDI outflow from UK in 2021 in Million US dollars |
| US | 69 043.2 |
| Canada | 3 051.7 |
| Ireland | 2 964.1 |
| Hong Kong* | 3 46.6 |
| Poland | 1 950.4 |
| Spain | 1 102.3 |
| Germany | 656.5 |
| Sweden | 561.7 |
| Portugal | 443.9 |
| Switzerland | 409.2 |
| Mexico | 1 882.6 |
| South Africa | 962.4 |
| Brazil | 951.8 |
| India | Confidential |
| Australia | Confidential |
Source: OECD International Direct Investment Statistics 2022
*Non-G20 country.
Confidential: The OECD has not provided information for these countries, and marked them confidential.
According to the Foreign Direct Investment Statistics (2023), the UK investment flows abroad in 2021 were as follows:
| Country | FDI outflow from UK in 2021 in Billions Great Britain Pounds (GBP) |
| US | 49 |
| UK offshore islands* | 13.1 |
| Finland | 6 |
| Ireland | 4.5 |
| Hong Kong* | 3.7 |
| Australia | 3.2 |
| Canada | 3.1 |
| South Africa | 2.4 |
| Switzerland | 2.1 |
| India | 2 |
Source: Foreign Direct Investment Statistics (2023)
*Non-G20 country.
This data shows that, of the G20 countries, the main destinations for UK’s FDI include: US, Canada, Ireland, Switzerland, India, South Africa and Australia
- FDI of the United States of America
FDI outflow of US
According to OECD International Direct Investment Statistics 2022, FDI outward flow from US in 2021 is as follows:
| Country | FDI outflow from US in 2021 in Million US dollars |
| Ireland | 77 302.0 |
| UK | 65 126.0 |
| Netherlands | 30 751.0 |
| Canada | 31 952.0 |
| Cayman Islands* | 27 251.0 |
| Luxembourg | 26 403.0 |
| Singapore | 14 966.0 |
| Germany | 12 961.0 |
| Switzerland | 11 074.0 |
| Norway | 10 102.0 |
| Mexico | 9 313 |
| Japan | 8 290.0 |
Source: OECD International Direct Investment Statistics 2022
*Non-G20 country.
According to Statista (2023), FDI outward flow from US in 2021 is as follows:
| Country | FDI outflow from US in 2021 in Billion US dollars |
| UK | 1 005.47 |
| Netherlands | 885.31 |
| Luxembourg | 715.59 |
| Ireland | 556.6 |
| Canada | 406.36 |
| UK Islands | 371.6 |
| Singapore | 294.54 |
| Bermuda* | 278.84 |
| Switzerland | 216.12 |
| Germany | 170.22 |
| Australia | 167.19 |
| Japan | 118.75 |
Source: Statista (2023)
*Non-G20 country.
This data shows that, of the G20 countries, the main destinations for US’s FDI include: UK, Netherlands, Luxembourg, Ireland, Canada, Singapore, Germany, Switzerland and Japan.
Conclusion
The destinations of the FDI for Turkey, Germany, China, Japan, US and UK are mainly each other and European Countries, especially Netherlands, Switzerland and Luxembourg which appear as a destination for most of the countries.
REFERENCES
Deutsche Bundesbank (2022) German Foreign Direct Investment in 2021/2022. https://www.bundesbank.de/en/press/press-releases/german-foreign-direct-investment-in-2021-2022-903736
OECD (2022) OECD International Direct Investment Statistics 2022 https://read.oecd-ilibrary.org/finance-and-investment/oecd-international-direct-investment-statistics-2022_deedc307-en#page328
Statista (2023) https://www.statista.com/
Türkiye Cumhuriyet Merkez Bankası (2023) International Investmet Position https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Statistics/Balance+of+Payments+and+Related+Statistics/International+Investment+Position/
UK Parliament House of Commons (2023) Foreign Direct Investment Statistics. https://researchbriefings.files.parliament.uk/documents/CBP-8534/CBP-8534.pdf
UNCTAD (2023) World Investment Report 2023. https://unctad.org/publication/world-investment-report-2023