Foreign direct investment

FOREIGN direct investment will increase markedly from 2007 to 2011, according to a report released on September 5th by the Economist Intelligence Unit. In 2007, global inflows are set to reach $1.5 trillion, above the record total of $1.4 trillion in 2000. Asia looks rosy to investors, despite political risks. China is the most attractive market, with forecast yearly inflows of $86.8 billion over the five-year period, the third-biggest global recipient. Inflows into India will grow, but to just $20.4 billion, thanks in part to inflexible labour laws and poor infrastructure. And Asia's biggest economy, Japan, punches far below its economic weight, with inflows of $13.3 billion a year. Cultural factors are a big hurdle. Many companies resist foreign takeovers for fear of harsh restructuring, and foreign investors say they struggle to find managerial talent.