As global trade patterns evolve, taking stock of cross-border greenfield investments could provide a clue about what trade flows might look like going forward. For example, announced investment in Africa and India has risen significantly relative to prepandemic averages—109 percent and 54 percent, respectively, according to Olivia White, a senior partner and a director of McKinsey Global Institute, and coauthors. Announced investment in China and Russia has declined substantially—by 67 percent for Greater China and 98 percent for Russia.
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Thirteen pairs of stacked bar graphs show average cross-border greenfield investment inflows and their sources for the periods 2015–19 and 2022–23. Advanced Europe received $289 billion in 2023, an increase in investment of 55%. Africa got $193 billion, an increase of 109%. The US and Canada got $169 billion, an increase of 33%. The Association of Southeast Asian Nations got $136 billion, an increase of 6%. Central Asia and the Middle East got $105 billion, an increase of 26%. India got $87 billion, an increase of 54%. Advanced Asia got $80 billion, an increase of 62%. Latin America got $60 billion, a decrease of 3%. Developing Europe got $58 billion, an increase of 33%. Mexico got $38 billion, an increase of 15%. Greater China got $34 billion, a decrease of 67%. The rest of Asia–Pacific got $11 billion, a decrease of 52%. Russia got $1 billion, a decrease of 98%.
Source: fDi Markets (a service from the Financial Times); McKinsey Global Institute analysis.
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To read the report, see “Geopolitics and the geometry of global trade,” January 17, 2024.