Thread by @Trinhnomics

Are you ready? This is our last lunch-time reading together before 2020. This one will be fun & short I promise.

Let's follow the money together, this time foreign direct investment (FDI) & we'll read @UNCTAD investment monitor together.

Here we go: global investment flows 👇🏻

@UNCTAD Remember what I said about how despite cutting rates by current account deficit (CAD) economies in Asia, credit transmission is clogged!

Why? Well, credit & fund flows ebbed (portfolio equity flows down & now u see that FDI is DOWN too 🥶

Regional contribution to H1 2019 FDI👇🏻

@UNCTAD What does this chart show?
a) Investment recovered somewhat from abysmal H1 2018 (read pinned tweet on impact of US tax reforms on GLOBAL FDI)
b) While global FDI recovered, MOSTLY WENT TO THE USA 🇺🇸 & to a lesser extent Europe
c) Sadly, the economies that need (EM) FDI are DOWN

@UNCTAD We can see that on top of portfolio investment being DOWN (for equities) for EM Asia, FDI flows are DOWN. But not everywhere & we'll talk about where it's up soon.

But let's 1st talk about who's HOOVERING FDI? THE USA 🇺🇸!!! Capital chases return & investors vote w/ their feet👇🏻

@UNCTAD But don't be sad!!! While capital flows to East Asia is down (-21%), driven by the decline of Hong Kong of -50% to USD20bn. Flows to China went up too at 4% to USD73.

That said, the STAR is SOUTHEAST ASIA💥with USD93bn of flows (20bn more than China) w/ mostly to MANUFACTURING!

@UNCTAD India is not doing too badly either w/ USD27bn in H1 2019 and that is an increase of 20% mostly to ICT (meaning after the 10% manufacturing tax cut more will come to manufacturing if India can introduce labor & land reforms)!!!

India 💥!!!👇🏻👇🏻👇🏻

@UNCTAD @Trinhnomics called this in Jan 2013 regarding the great migration of FDI moving to ASEAN & India. This has been proven true 7 years later as capital flows to Southeast Asia exceeds China (remember that ASEAN is small in terms of GDP relative to China so FDI key).

Now India too!

@UNCTAD The issue is that Indonesia has not realized its potential as stated in this report while Vietnam has exceeded expectations in its ability to attract FDI inflows & thus has gained the MOST export market share in Asia. So policy is key!

Chart below 👇🏻👇🏻

https://twitter.com/Trinhnomics/status/1191599100212285440?s=20