America is sucking in growth from the rest of the world

Global foreign direct investment is flowing west - this may well be one of Trump's biggest legacies.

- Gillian Tett

What on earth - or in cyberspace - is happening to business investment in America? A decade ago, when capital investment seemed deplorably weak, economists were asking that question with a tone of alarm.

No longer. The current mania for artificial intelligence is contributing to such eye-popping levels of tech investment that capital expenditure, or capex, has become the key driver for America's recent growth.

Unsurprisingly, US President Donald Trump is crowing. Last week, the White House website trumpeted the claim that he has delivered US$8.8 trillion (S$11.4 trillion) of new investment pledges that amounts to around a quarter of the entire economy.

The governments of the United Arab Emirates, Qatar, Japan and Saudi Arabia apparently account for much of this a collective US$4.2 trillion. However, companies such as Apple and Nvidia have also promised at least US$500 billion capex, each. So have anonymous "EU companies".

Is this real?

The answer is not easy, since investment flow data is notoriously patchy and late. However, if you scrutinise sources such as fDi Intelligence (a Financial Times-owned group), the Federal Reserve, the Peterson Institute for International Economics and a new report from McKinsey, you get both "yes" and "no". Because there are at least four striking points to note about foreign direct investment (FDI).