A New Era of Global Investment: How Promotion Strategies Respond to Structural Change

Executive Summary

Global foreign direct investment (FDI) is undergoing a profound structural transformation. The 2026 FDI Outlook Survey shows that 101 investment experts worldwide expressed widespread concern about geopolitical disruption, economic uncertainty, and financial volatility, yet remain cautiously optimistic about the prospects for 2026. Key industries have become pillars of cross-border capital flows, and the center of gravity of FDI sources continues to shift eastward. Resilience, selective openness, and innovation are becoming the core forces driving a new wave of FDI flows. For policymakers and investment promotion agencies, the challenge lies in how to adjust strategies and practices to adapt to this transformation. Based on a third-party research perspective, this article analyzes the changes in the current global investment environment, driving factors, regional and industrial impacts, and the evolution of investment patterns, explores the direction of restructuring investment promotion strategies, and offers key insights for the future.

Introduction

For the past few decades, global FDI has been primarily efficiency-oriented, with multinational enterprises pursuing cost minimization and market expansion. However, in recent years, geopolitical tensions, supply chain disruptions, intensified technological competition, and climate policy drivers have fundamentally changed the global investment environment. FDI is no longer just a capital flow; it has become an important tool for national strategic competition, industrial security, and resilience building. Understanding these changes is crucial for business managers, policymakers, and investment researchers. This article aims to analyze the structural shift in the global FDI landscape and explore how investment promotion policies can adapt to the new reality.

1. Current Landscape: Key Features of the Global Investment Environment

The current global investment environment presents a complex picture. According to the 2026 FDI Outlook Survey, 101 investment experts worldwide generally believe that geopolitical instability, economic policy uncertainty, and financial volatility are the main risks affecting future investment flows. However, despite these uncertainties, respondents' assessments of the global FDI outlook for 2026 are not entirely pessimistic, but rather show "cautious optimism."

Global FDI flows are shifting from efficiency-driven to resilience-driven. Investors are no longer focusing solely on cost advantages, but are placing greater emphasis on the security and stability of supply chains. This has led to a transformation of global value chains from global distribution to regional clusters. Supplier networks are being diversified and restructured, with new markets, industries, and sources of capital constantly emerging.

Key industries such as technology, energy, and advanced manufacturing have become core areas of cross-border investment. At the same time, the source structure of FDI has shifted significantly eastward, with sovereign wealth funds, institutional investors, and multinational enterprises from East Asia, Southeast Asia, and the Middle East becoming important suppliers of global capital.

This landscape implies that the traditional FDI attraction model centered on locational advantages and cost comparisons is becoming ineffective. Investors place more value on the host country's strategic position, industrial ecosystem, and policy predictability.

2. Key Drivers Behind the Transformation

Why has global FDI undergone such profound changes? This can be analyzed from the following dimensions.Economic factors: Slower global economic growth, interest rate fluctuations, and inflationary pressures have made corporate investment decisions more cautious. Meanwhile, experience with supply chain disruptions has prompted companies to rethink their global footprint, prioritizing resilience and risk diversification.

Political and geopolitical factors: Great-power competition, trade barriers, and national security reviews are increasingly affecting cross-border investment. Many economies are seeking a balance between openness and protection, with foreign investment screening mechanisms and technology export controls becoming the new normal. This "openness-security paradox" has become a core dilemma for policymakers.

Technological factors: New technologies such as artificial intelligence, automation, and digital platforms are reshaping the value logic of investment. Technology-intensive investment is growing rapidly, but it has also raised new concerns about technological dependence and national security. AI is seen both as a productivity revolution and as a dependency risk, and investors are divided on this issue.

Industrial factors: The green transition and sustainable development goals have made renewable energy, electric vehicles, batteries, and other green industries investment hotspots. At the same time, sectors related to public safety, such as healthcare and digital services, have also gained more attention.

Policy factors: Government industrial policies, tax incentives, regulatory frameworks, and subsidies for key industries directly affect the flow of capital. The role of investment promotion agencies (IPAs) is also changing, shifting from purely marketing and promotion to ecosystem building and strategic guidance.

These factors are intertwined and together have driven the restructuring of global FDI. For policymakers, the key lies in understanding these dynamics and adjusting their tools accordingly.

3. Regional and Industrial Impacts

Advanced Economies

Advanced economies remain attractive in advanced manufacturing, digital technology, and high-value-added services, but face competition from emerging markets. Some countries are attempting to localize key industrial chains by strengthening national security reviews and industrial subsidies, which may change the pattern of cross-border investment. For example, the semiconductor and clean technology industrial policies pursued by the United States and the European Union may both attract investment in related fields and increase the complexity of foreign investment access.

Emerging Markets

East Asia and Southeast Asia have become important destinations for global FDI, thanks to their large market sizes, well-established supply chain infrastructure, and continuously upgrading innovation capabilities. Sovereign wealth funds in the Middle East are making strategic investments globally, diversifying the sources of capital. Investment promotion agencies in these regions are actively adjusting their strategies to attract high-quality, technology-intensive investment and foster local innovation capacity.

Sector-Level Perspective- Technology industry: Artificial intelligence, cloud computing, semiconductors and other fields have become investment hotspots, but countries are increasingly focusing on technology transfer and export controls. Investors place greater value on host countries' technical talent and innovation ecosystems.

• Energy industry: Renewable energy and energy storage projects attract substantial long-term capital, but policy subsidies and regulatory changes may affect project returns. Multinational corporations are also mitigating risks through joint ventures and partnerships.
• Manufacturing: Supply chain diversification is driving the construction of regional production networks, with Mexico, Vietnam, India and other countries becoming new manufacturing hubs. Automation is changing comparative advantages in labor costs and driving more capital-intensive investment.
• Healthcare: After the pandemic, the resilience of public health systems has received attention. Multinational pharmaceutical and medical device companies are adjusting their global production layouts while focusing on localization needs in emerging markets.Technology governance: The not-yet-finalized rules for AI and digital trade may lead to uncertainty for investments at the compliance and ethical levels.

For investment promotion agencies, it is necessary to play a role amid these uncertainties, helping enterprises understand the policy environment and providing stable matchmaking services.

6. Long-term Outlook

In the long run, global FDI is experiencing not a cyclical downturn but a structural transformation. This assessment is based on profound economic and technological changes.

First, the realignment of global value chains is expected to continue. Companies will place greater emphasis on security and resilience rather than simply pursuing efficiency, which may further strengthen regionalized investment networks.

Second, sustainable development and digital transformation will become long-term investment themes. Green technologies and digital infrastructure may require enormous capital, creating opportunities for forward-looking economic systems.

Third, the sources of FDI will become more diversified. Institutional investors from emerging markets and the Middle East will see their position in international capital flows further elevated, and the balance of global capital flows may shift.

Fourth, policy quality will become a key factor determining a country's attractiveness. Countries with transparent, stable, and predictable policy environments, and that are able to provide innovation ecosystems, are expected to gain an advantage in global FDI competition.

It should be noted that the future is not a deterministic linear evolution. Geopolitical risks, policy shifts, and technological breakthroughs could all alter the trajectory. Countries need to maintain strategic flexibility and policy adaptability.

Key Insights

Insight 1: Global FDI is undergoing a structural transformation from efficiency-driven to resilience-driven, and the competitiveness of future investment will be reflected more in supply chain security and ecosystem capabilities.

Insight 2: The "openness-security paradox" is a core challenge for investment promotion policy. Policymakers need to adopt a "guarded openness" strategy, balancing technology introduction and local capacity building.

Insight 3: Investment promotion agencies need to transform from traditional promoters into strategic catalysts, expanding their service targets from multinational corporations to institutional investors, asset-light models, and foreign investors.

Insight 4: The center of gravity of global FDI sources is shifting eastward. Emerging markets and sovereign wealth funds will play a more important role in future investment flows, and investment promotion strategies should be designed for these new actors.

Insight 5: Sustainable development and digitalization are the mainstream of future long-term investment. The definition of national attractiveness has moved beyond traditional incentive policies, shifting toward strategic openness, resilience, and innovation ecosystems.