According to a survey of over 300 corporate investment strategists, China is expected to surpass the United States as the top destination for foreign direct investment in the next 5 years due to its large population and strong economic growth. The survey also found that the BRIC countries (Brazil, Russia, India, China) are attracting more global corporate investment than traditional destinations like the US, Japan, and Europe due to attributes like market access, political stability, infrastructure development and low labor costs. While the US remains an important market, its relatively high taxes and regulations could cause some corporate investment to shift to emerging economies that are making efforts to accelerate economic and social development.

1. CURRENT TRENDS IN INTERNATIONAL CAPITAL FLOW

2. “ The only certain thing about the shape of the global economy in the future is that it will be different from what we see today”

3. Investing in Other Countries Researchers asked over 300 senior corporate investment strategists in 15 countries what other countries they plan on investing in during 2008/2009 27% United States 17% China 14% United Kingdom 13% Germany 12% Russia

5. In 5 Years China is expected to take the lead 24% China 23% United States 19% Russia 18% India 17% United Kingdom

7. Attributes for Investing Access to new customers Political stability Impartial rule of law Infrastructure Regulatory climate Tax regime Cultural Fit High quality of labor Transport Reengineering the business model Reengineering the supply chain Low labor costs

8. BRIC Global corporate investment flows are switching from the U.S., Japan, Singapore and some European countries to China, India, Russia and Brazil (BRIC) good market prospects expansive social stability predictability of outcomes a commercially aware approach to taxation survey shows a strong vote of confidence in the efforts that these countries have been making to accelerate their economic and social improvement

9. What about us? The U.S. economy remains a world leader, but is expected to share this position with China Less clear what respondents think about the U.S. It’s a vote against high levels of regulation and a relatively high tax burden? A return to long term patterns of investment from corporate investors Little comfort to U.S.

10. Europe Survey results present a dilemma Corporate investment clearly flows to new markets Little that Europeans can do in the short term to match the population and prosperity growth of BRIC Survey says, corporates like stability and predictability Should develop and emphasize the quality of social infrastructure in the their economies Presents a new route forward for Europe