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Archive:Foreign direct investment between the European Union and BRIC

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This article presents the foreign direct investment (FDI) between the European Union (EU) and the BRIC countries – Brazil, Russia, India and China (including Hong Kong)[1]

Figure 1: FDI flows between the EU and BRIC countries, 2009-2013p, EUR billion - Source: Eurostat (bop_fdi_main)


FDI flows

The preliminary figures for 2013 based on annualised quarterly balance of payments data for outward FDI flows to those countries show a slight decline from the previous year, and a 52.56 % decrease compared to the peak levels of 2010. (Figure 1) The respective share in total Extra-EU flows also dropped likewise.

As regard inward flows, both absolute and relative contribution of the BRIC countries to total extra EU FDI flows were less volatile during the studied period. They doubled in 2013 to minimise the gap in the bilateral FDI balance with the EU.

Figure 1 FDI flows between the EU and BRIC countries, 2009-2013p, EUR billion



Over the period 2009-2013, the main BRIC destination of EU FDI flows was Brazil (EUR 146 bn), followed by China and Hong Kong combined (EUR 106 bn).

Table 1 FDI flows from the EU to BRIC countries, 2009-2013p, EUR billion

Table 2 FDI flows from BRIC countries to the EU, 2009-2013p, EUR billion

In 2013, the main EU investor in Brazil and Russia was Luxembourg[2] , while Germany dominated the EU investment in India and China (including Hong Kong). France was among the top four EU investors in all BRIC countries. (Figures 2a, 2b, 2c and 2d)

Figure 2a Main EU investors in Brazil, FDI flows, 2013p

Figure 2a Main EU investors in Russia, FDI flows, 2013p

Figure 2a Main EU investors in India, FDI flows, 2013p

Figure 2a Main EU investors in China (incl. Hong Kong), FDI flows, 2013p

FDI stocks

The FDI stocks between the EU stocks and the BRIC countries doubled between 2008 and 2012 both directions. Similar to FDI flows, the EU is a net investor vis-à-vis those countries. (Figure 3)

Figure 3 FDI stocks between the EU and BRIC countries, 2009-2012, EUR billion

In 2012, 14 % of total outward stocks in extra EU were located in the BRIC countries. (Table 3) One third (EUR 251 bn) of these were positioned in China (incl. Hong Kong) and another third (EUR 247 bn) – in Brazil. The highest growth between 2008 and 2012 was recorded for India (135%).

Table 3 EU FDI stocks in BRIC countries, 2008-2012, EUR billion

In 2012, the BRIC countries held EUR 261 bn in the EU, Brazil being the main FDI holder with EUR 98 bn. (Table 4) The Russian FDI positions in the EU increased by 155% during the studied period.

Table 4 BRIC FDI stocks in the EU, 2008-2012, EUR billion

Table 5 shows the EU FDI stocks by main activity in BRIC countries over the period 2008-2011. Overall, the EU invested predominantly in the Service sectors. Exceptions were China (excluding Hong Kong) and India, where the Manufacturing sector held about 40% and 60%, respectively, of total EU FDI stocks in those economies at the end of 2011. The financial sector attracted more than half of the EU investments in Hong Kong and one third in Russia in 2011. The latter almost tripled from 2008.

The EU investments in Brazil were mainly held the Service sector, in particular in financial services and telecommunications. Mining (including extraction of petroleum and gas) and the related manufacturing activities were also an important location of the EU FDI stocks in that country.

Table 5 EU FDI stocks in BRIC countries by main activity, 2008-2011, EUR billion


See also

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Notes

  1. The high share of Hong Kong over China figures is due to the fact that investment to/from China are often channelled through Hong Kong
  2. The first position of Luxembourg is due to the SPEs


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