The geopolitical environment has become more difficult for investors. Geo-economic developments are further causes of concern, starting with the intensifying trade tensions between China, the United States and the European Union. Protectionism with trade barriers and tariffs is on the rise, “de-risking” the patterns of global supply chains and capital flows.

Foreign direct investment (FDI) has more than halved in the developed world from the peak of around $2 trillion in the years 2015 and 2016.

Emerging markets have held up better, thanks primarily to flows within Asia, according to U.N. Trade and Development (UNCTAD). COVID-19 and the spike in inflation and interest rates obviously had an effect, at least temporarily. What is more concerning longer term is the impact of political action.

New foreign investment laws have been spreading across the world throughout the past 15 years. Favorable interventions are typically tax incentives, subsidies or outbound