文章基本信息

标题：Direct Investment Positions for 1999.
作者：Bargas, Sylvia E.
期刊名称：Survey of Current Business
印刷版ISSN：0039-6222
出版年度：2000
期号：July
语种：English
出版社：U.S. Government Printing Office
摘要：IN 1999, the historical-cost position of foreign direct investment in the United States (FDIUS) grew 24 percent, while that of U.S. direct investment abroad (USDIA) grew 12 percent. The difference between the two growth rates was the largest since 1988.
关键词：Foreign investments

Direct Investment Positions for 1999.

Bargas, Sylvia E.

Country and Industry Detail

IN 1999, the historical-cost position of foreign direct investment in the United States (FDIUS) grew 24 percent, while that of U.S. direct investment abroad (USDIA) grew 12 percent. The difference between the two growth rates was the largest since 1988.

This article presents the country and industry detail underlying the two positions. The estimates are prepared on a historical-cost basis, which is not adjusted for inflation. Because most investments reflect price levels of earlier periods, the estimates on this valuation basis understate the current values of the positions. Current-cost and market-value estimates of the positions are also prepared, but only at an aggregate level. The revised estimates of the positions for 1998 and preliminary estimates for 1999 are shown on all three valuation bases in table 1.(1)

Table 1.--Alternative Direct Investment Position Estimates, 1998 and 1999

[Millions of dollars]

 Position Change in 1999
 at (decrease (-))
Valuation method yearend Capital
 1998(r) Total flows

U.S. direct investment
 abroad:

 Historical cost 1,014,012 118,610 138,510
 Current cost 1,207,059 124,128 150,901
 Market value 2,173,547 441,985 150,901

Foreign direct investment
 in the United States:

 Historical cost 793,748 192,920 271,169
 Current cost 928,645 196,569 275,533
 Market value 2,190,990 609,746 275,533

 Changes
 in 1999
 (decrease
 (-))
 Position
 Valu- at
Valuation method ation yearend
 adjust- 1999(p)
 ments
U.S. direct investment
 abroad:

 Historical cost -19,901 1,132,622
 Current cost -26,773 1,331,187
 Market value 291,084 2,615,532

Foreign direct investment
 in the United States:

 Historical cost -78,249 986,668
 Current cost -78,964 1,125,214
 Market value 334,213 2,800,736

(p) Preliminary.

(r) Revised.

The strong growth in both positions reflected a global boom in merger and acquisition ,activity, favorable economic conditions in the United States, Europe, and Canada, and improved economic conditions in the Asia and Pacific area. The favorable conditions enhanced the profit potential of direct investments and boosted the earnings of affiliates and their parents. Strong earnings by affiliates and high rates of reinvestment led to high levels of reinvested earnings. Strong earnings by parents provided a source of funds for new investments and reduced the parents' need to draw funds from their affiliates.

The much larger increase in the position of FDIUS than in that of USDIA primarily reflected the strength of the U.S. economy. Propelled by technological innovation and strong gains in productivity, the U.S. economy has been growing rapidly in recent years, enhancing the attractiveness of potential investments in the United States. Change has been especially dramatic in the communications industry, which accounted for much of the growth in the FDIUS position in 1999. Acquisition activity for FDIUS was heavily tilted towards the communications and related industries and included some unusually large transactions. Acquisitions of communications-related firms played a less prominent role in the increase in the USDIA position. In addition, some large foreign affiliates were sold off in 1999, which dampened the growth of the USDIA position.

The composition of capital flows underlying the changes in the two positions differed. As in most previous years, the largest component of capital outflows for USDIA was reinvested earnings, which tend to be used mainly to finance the ongoing operations of foreign affiliates. The largest component of capital inflows for FDIUS continued to be equity capital, which consists of funds used to acquire and establish new U.S. affiliates and of capital contributions to existing U.S. affiliates. To some extent, this difference in composition reflects the greater average maturity of foreign affiliates relative to U.S. affiliates and the relatively greater role of acquisitions in recent growth in FDIUS. Many foreign affiliates of U.S. companies were acquired or established decades ago and can now be sustained largely through the retention of their own earnings. In contrast, U.S. affiliates of foreign companies tend to be of more recent vintage and to rely more heavily on contributions of equity capital from their foreign parents to build their operations. The less prominent role of reinvested earnings in FDIUS also reflects relatively lower profitability for U.S. affiliates than for foreign affiliates.(2)

U.S. Direct Investment Abroad

The position of USDIA valued at historical cost--the book value of U.S. direct investors' equity in, and net outstanding loans to, their foreign affiliates--was $1,132.6 billion at the end of 1999 (table 2 and chart 1). The largest positions remained those in the United Kingdom ($213.1 billion, or 19 percent of the total), Canada ($111.7 billion, or 10 percent), and the Netherlands ($106.4 billion, or 9 percent) (table 3.2 and chart 2).

[Charts 1-2 OMITTED]

Table 2.--U.S. Direct Investment Position Abroad and Foreign Direct Investment Position in the United States on a Historical-Cost Basis, 1982-99

 Millions of Dollars

Yearend U.S. direct Foreign direct
 investment investment
 position position in the
 abroad United States

1982 207,752 124,677
1983 212,150 137,061
1984 218,093 164,583
1985 238,369 184,615
1986 270,472 220,414
1987 326,253 263,394
1988 347,179 314,754
1989 381,781 368,924
1990 430,521 394,911
1991 467,844 419,108
1992 502,063 423,131
1993 564,283 467,412
1994 612,893 480,667
1995 699,015 535,553
1996 795,195 598,021
1997 (r)871,316 (r)689,834
1998 (r)1,014,012 (r)793,748
1999 (p)1,132,622 (p)986,668

 Percent change from
 preceding year

Yearend U.S. direct Foreign direct
 investment investment
 position position in the
 abroad United States

1982 ... ...
1983 2.1 9.9
1984 2.8 20.1
1985 9.3 12.2
1986 13.5 19.4
1987 20.6 19.5
1988 6.4 19.5
1989 10.0 17.2
1990 12.8 7.0
1991 8.7 6.1
1992 7.3 1.0
1993 12.4 10.5
1994 (1) (1)
1995 14.1 11.4
1996 13.8 11.7
1997 9.6 15.4
1998 16.4 15.1
1999 11.7 24.3

(p) Preliminary.

(r) Revised.

(1.) The USDIA and FDIUS positions reflect a discontinuity between 1993 and 1994 due to the reclassification from direct investment to other investment accounts of intercompany debt between parent companies and affiliates that are nondepository financial intermediaries.

Table 3.2.--U.S. Direct Investment Position Abroad on a Historical-Cost Basis, 1999

[Millions of dollars]

 All
 industries Petroleum

 All countries 1,132,622 99,925

Canada 111,707 16,416

Europe 581,791 33,990
 Austria 3,696 (D)
 Belgium 17,285 109
 Denmark 3,887 762
 Finland 1,355 32
 France 39,984 1,044

 Germany 49,617 2,683

 Greece 602 (D)
 Ireland 19,823 (D)
 Italy 17,595 (D)
 Luxembourg 15,263 53
 Netherlands 106,436 3,296

 Norway 6,601 4,078
 Portugal 1,478 (D)
 Spain 12,456 200
 Sweden 9,595 86
 Switzerland 51,227 271
 Turkey 1,299 79
 United Kingdom 213,070 17,443
 Other 10,522 2,028

Latin America and Other 223,182 8,715
 Western Hemisphere

 South America 74,839 6,364
 Argentina 14,187 601
 Brazil 35,003 1,703
 Chile 9,886 33
 Colombia 4,029 973
 Ecuador 1,202 639
 Peru 2,532 268
 Venezuela 6,750 2,048
 Other 1,250 98

 Central America 70,774 1,268
 Costa Rica 1,646 30
 Guatemala 453 146
 Honduras 56 (D)
 Mexico 34,285 168
 Panama 33,429 648
 Other 924 (D)

 Other Western Hemisphere 77,569 1,063
 Bahamas 1,055 15
 Barbados 1,131 (D)
 Bermuda 45,959 (D)
 Dominican Republic 952 156
 Jamaica 2,469 (D)
 Netherlands Antilles 4,377 (D)
 Trinidad and Tobacco 1,094 790
 United Kingdom Islands, 19,948 304
 Caribbean
 Other 573 50

Africa 15,062 9,629
 Egypt 2,213 1,485
 Nigeria 1,375 1,148
 South Africa 3,258 372
 Other 8,216 6,623

Middle East 11,137 3,246
 Israel 3,199 4
 Saudi Arabia 4,231 237
 United Arab Emirates 543 221
 Other 3,163 2,785

Asia and Pacific 185,912 25,347
 Australia 33,662 3,344
 China 7,766 991
 Hong Kong 20,848 398
 India 1,189 -388
 Indonesia 10,504 7,378
 Japan 47,786 4,419
 Korea, Republic of 8,749 1,550
 Malaysia 5,989 1,041
 New Zealand 6,080 177
 Philippines 3,792 601
 Singapore 24,781 2,815
 Taiwan 6,860 60
 Thailand 6,966 2,529
 Other 940 4,301

International(1) 3,832 2,580

Addenda:
 Eastern Europe(2) 8,840 2,071
 European Union (15)(3) 512,141 27,534
 OPEC(4) 28,280 15,284

 Manufacturing

 Food and Chemicals
 kindred and allied
 Total products products

 All countries 318,121 36,126 82,794

Canada 44,023 4,983 7,637

Europe 161,627 17,366 51,743
 Austria 1,115 31 53
 Belgium 7,176 1,037 4,176
 Denmark 1,449 148 78
 Finland 486 7 357
 France 17,210 3,246 3,947

 Germany 24,351 500 3,929
 Greece 66 -32 47
 Ireland 8,949 621 3,172
 Italy 9,394 813 3,394
 Luxembourg 2,569 -2 0
 Netherlands 19,508 2,311 10,603

 Norway 871 (D) 17
 Portugal 436 110 103
 Spain 7,786 1,579 1,507
 Sweden 2,207 6 269
 Switzerland 5,702 (D) 3,051
 Turkey 736 186 88
 United Kingdom 49,699 5,795 16,582
 Other 1,918 339 369

Latin America and Other 51,294 966 11,759
 Western Hemisphere

 South America 28,491 4,109 6,895
 Argentina 3,587 876 1,299
 Brazil 20,225 2,149 4,617
 Chile 1,323 192 231
 Colombia 1,212 305 334
 Ecuador 285 76 94
 Peru 192 66 83
 Venezuela 1,538 414 230
 Other 178 32 37

 Central America 20,285 5,707 3,331
 Costa Rica 663 111 158
 Guatemala 217 91 74
 Honduras 212 201 2
 Mexico 18,861 6,257 3,037
 Panama 157 36 31
 Other 156 11 30

 Other Western Hemisphere 2,537 149 1,532
 Bahamas 89 0 78
 Barbados 22 (D) 0
 Bermuda (D) (D) (D)
 Dominican Republic 470 26 26
 Jamaica 282 (D) (D)
 Netherlands Antilles 27 (D) 0
 Trinidad and Tobacco 48 (*) 5
 United Kingdom Islands, 1,271 1 (D)
 Caribbean
 Other (D) 0 (D)

Africa 1,964 714 351
 Egypt 573 (D) 91
 Nigeria 65 (D) 26
 South Africa 836 166 191
 Other 490 115 43

Middle East 2,321 71 18
 Israel 2,168 78 14
 Saudi Arabia 144 (D) 74
 United Arab Emirates 90 0 (D)
 Other -81 (D) (D)

Asia and Pacific 56,891 3,027 11,287
 Australia 7,646 862 2,924
 China 4,789 150 259
 Hong Kong 3,798 -21 393
 India 486 -65 92
 Indonesia 66 20 79
 Japan 13,332 650 3,397
 Korea, Republic of 3,651 479 665
 Malaysia 3,555 5 253
 New Zealand 708 221 92
 Philippines 1,270 351 419
 Singapore 11,367 -4 628
 Taiwan 3,631 44 1,804
 Thailand 2,571 113 312
 Other -18 22 -27

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 1,878 339 364
 European Union (15)(3) 152,400 16,173 48,218
 OPEC(4) 1,838 481 339

 Manufacturing

 Primary Industrial Electronic
 and machinery and other
 fabricated and electric
 metals equipment equipment

 All countries 18,803 37,833 38,449

Canada 3,123 3,269 2,455

Europe 10,730 20,116 15,386
 Austria 1 67 413
 Belgium 132 205 328
 Denmark (D) (D) 260
 Finland (D) 3 33
 France 4,322 1,282 819

 Germany 1,531 4,605 1,735
 Greece 1 0 11
 Ireland 184 158 1,570
 Italy 98 1,019 996
 Luxembourg (D) 9 -1
 Netherlands 256 694 3,636

 Norway 9 216 7
 Portugal -8 (D) 192
 Spain 1,191 125 1,015
 Sweden 418 192 140
 Switzerland 178 480 754
 Turkey 173 0 -10
 United Kingdom 1,953 10,066 3,562
 Other 151 413 -73

Latin America and Other 3,055 3,141 2,906
 Western Hemisphere

 South America 2,472 1,744 1,988
 Argentina 361 62 -20
 Brazil 1,359 1,647 1,850
 Chile (D 20 (D)
 Colombia (D) -7 (D)
 Ecuador -1 0 (*)
 Peru (D) 1 0
 Venezuela 104 21 122
 Other 0 1 0

 Central America 562 1,396 597
 Costa Rica 24 (D) 85
 Guatemala 2 0 0
 Honduras (*) 0 0
 Mexico 511 (D) (D)
 Panama 17 0 0
 Other 8 0 (D)

 Other Western Hemisphere 21 1 320
 Bahamas 0 -1 0
 Barbados 0 0 2
 Bermuda 0 0 (D)
 Dominican Republic 0 0 0
 Jamaica 0 0 0
 Netherlands Antilles 0 0 0
 Trinidad and Tobacco (D) (D) 2
 United Kingdom Islands, (D) 0 (D)
 Caribbean
 Other 0 0 0

Africa 251 50 75
 Egypt (D) 14 -2
 Nigeria -1 0 0
 South Africa (D) 34 60
 Other 197 3 17

Middle East 35 38 1,536
 Israel 7 14 1,534
 Saudi Arabia 15 (D) 2
 United Arab Emirates 13 4 0
 Other 0 (D) 0

Asia and Pacific 1,609 11,219 16,090
 Australia 471 693 166
 China 203 946 2,343
 Hong Kong 398 381 1,444
 India -31 355 131
 Indonesia 5 -21 19
 Japan 323 1,049 2,054
 Korea, Republic of 25 409 930
 Malaysia -6 419 2,589
 New Zealand 44 17 41
 Philippines 41 19 258
 Singapore 23 5,280 4,637
 Taiwan (D) 317 1,109
 Thailand 70 1,359 366
 Other (D) -5 3

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 151 413 -103
 European Union (15)(3) 10,218 19,007 14,708
 OPEC(4) 136 19 143

 Manufacturing

 Transpor- Other
 tation manu- Wholesale
 equipment facturing trade

 All countries 36,013 68,103 80,148

Canada 9,965 12,592 8,982

Europe 14,869 31,417 46,466
 Austria 351 198 603
 Belgium 331 986 3,456
 Denmark -11 (D) (D)
 Finland -2 (D) 351
 France 527 3,067 2,839

 Germany 7,481 4,571 3,197
 Greece 0 39 85
 Ireland 38 3,206 235
 Italy 913 2,182 2,129
 Luxembourg 0 (D) (D)
 Netherlands 112 1,895 8,498

 Norway (D) (D) 314
 Portugal 65 (D) 355
 Spain 1,346 1,022 1,245
 Sweden -132 1,313 0
 Switzerland (D) 769 14,289
 Turkey 173 125 -27
 United Kingdom 3,213 8,528 7,175
 Other (D) (D) 494

Latin America and Other 7,648 12,818 7,620
 Western Hemisphere

 South America 3,367 7,915 1,761
 Argentina 187 773 488
 Brazil 2,764 5,839 355
 Chile (D) 195 365
 Colombia (D) (D) 130
 Ecuador 37 78 66
 Peru 0 (D) 81
 Venezuela 214 434 149
 Other 3 105 126

 Central America 4,281 4,390 2,534
 Costa Rica 0 (D) 867
 Guatemala 0 50 25
 Honduras 3 6 2
 Mexico 4,278 4,198 1,167
 Panama 0 72 442
 Other 0 (D) 31

 Other Western Hemisphere 0 514 3,325
 Bahamas 0 14 75
 Barbados 0 268
 Bermuda 0 0 1,901
 Dominican Republic 0 419 29
 Jamaica 0 6 266
 Netherlands Antilles 0 (D) 20
 Trinidad and Tobacco 0 (D) 21
 United Kingdom Islands, 0 35 743
 Caribbean
 Other 0 3 3

Africa 168 357 179
 Egypt (D) 2 48
 Nigeria (D) 0 5
 South Africa 76 (D) 87
 Other (D) (D) 39

Middle East -12 636 335
 Israel 6 514 130
 Saudi Arabia (D) (D) 97
 United Arab Emirates 0 (D) 107
 Other (D) -3 1

Asia and Pacific 3,376 10,283 16,566
 Australia 957 1,573 2,146
 China 123 765 201
 Hong Kong 27 1,178 4,851
 India -123 108 128
 Indonesia (D) (D) 8
 Japan 2,044 3,615 5,429
 Korea, Republic of 175 968 810
 Malaysia 0 296 139
 New Zealand 0 355 255
 Philippines 0 181 184
 Singapore 230 573 1,354
 Taiwan (D) (D) 614
 Thailand 40 311 416
 Other (D) 0 31

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 145 568 335
 European Union (15)(3) 14,234 29,842 31,398
 OPEC(4) 60 661 357

 Finance
 (except
 depository
 institu-
 tions),
 Deposi- insurance,
 tory and real
 institutions estate

 All countries 39,937 436,024

Canada 1,977 25,084

Europe 23,368 237,659
 Austria (D) 140
 Belgium 365 3,728
 Denmark (*) 869
 Finland 20 259
 France 1,852 10,583

 Germany 1,388 14,131
 Greece 138 146
 Ireland -7 7,960
 Italy 390 1,656
 Luxembourg 228 11,700
 Netherlands (D) 64,199

 Norway (D) 640
 Portugal (D) 173
 Spain 2,022 435
 Sweden (D) 5,604
 Switzerland 2,844 25,684
 Turkey 292 7
 United Kingdom 9,778 86,659
 Other (D) 3,085

Latin America and Other 2,371 124,072
 Western Hemisphere

 South America 5,595 15,385
 Argentina 2,205 4,837
 Brazil 2,034 5,225
 Chile 658 3,404
 Colombia (D) 929
 Ecuador (D) 123
 Peru 133 293
 Venezuela 50 434
 Other 302 121

 Central America 1,342 38,395
 Costa Rica 0 4
 Guatemala 4 (D)
 Honduras 5 4
 Mexico 1,182 6,308
 Panama 131 31,805
 Other (D) (D)

 Other Western Hemisphere -4,567 70,312
 Bahamas -2,193 2,871
 Barbados 25 389
 Bermuda 0 42,367
 Dominican Republic 71 (*)
 Jamaica 14 (D)
 Netherlands Antilles 0 4,311
 Trinidad and Tobacco (D) (D)
 United Kingdom Islands, -2,561 19,867
 Caribbean
 Other (D) (D)

Africa 363 505
 Egypt 177 0
 Nigeria (D) (D)
 South Africa (D) 605
 Other 119 (D)

Middle East 834 2,448
 Israel 0 405
 Saudi Arabia (D) 1,701
 United Arab Emirates (D) (D)
 Other -39 (D)

Asia and Pacific 11,025 46,856
 Australia 2,705 8,465
 China 69 784
 Hong Kong 1,873 5,766
 India 420 263
 Indonesia 287 287
 Japan 608 14,928
 Korea, Republic of 2,110 47
 Malaysia 440 483
 New Zealand (D) 3,676
 Philippines 283 1,028
 Singapore 582 8,103
 Taiwan 691 1,577
 Thailand 625 385
 Other (D) 62

International(1) ... ...

Addenda:
 Eastern Europe(2) 469 2,792
 European Union (15)(3) 18,442 208,242
 OPEC(4) (D) 2,793

 Other
 Services industries

 All countries 68,763 89,705

Canada 64,381 8,785

Europe 42,379 36,301
 Austria 158 -65
 Belgium 2,593 -142
 Denmark 99 (D)
 Finland 64 143
 France 5,400 1,257

 Germany 2,373 1,493
 Greece (D) (D)
 Ireland 1,994 (D)
 Italy 2,397 (D)
 Luxembourg (D) 18
 Netherlands 9,031 (D)

 Norway 273 (D)
 Portugal 158 69
 Spain 465 304
 Sweden 1,039 (D)
 Switzerland 1,865 571
 Turkey 67 146
 United Kingdom 14,285 28,031
 Other 50 (D)

Latin America and Other 6,203 22,908
 Western Hemisphere

 South America 2,222 15,041
 Argentina 597 1,922
 Brazil 648 4,613
 Chile 211 3,893
 Colombia 62 (D)
 Ecuador 4 (D)
 Peru 48 1,516
 Venezuela 428 2,104
 Other 24 401

 Central America 1,599 5,350
 Costa Rica -2 83
 Guatemala 4 (D)
 Honduras 0 (D)
 Mexico 1,303 5,257
 Panama 285 -38
 Other 9 190

 Other Western Hemisphere 2,382 2,516
 Bahamas 154 55
 Barbados 289 (D)
 Bermuda 1,657 (D)
 Dominican Republic 20 205
 Jamaica 46 (D)
 Netherlands Antilles (D) (*)
 Trinidad and Tobacco 1 (D)
 United Kingdom Islands, 154 17
 Caribbean
 Other (D) (D)

Africa 307 1,715
 Egypt -81 11
 Nigeria 0 5
 South Africa 317 (D)
 Other 72 (D)

Middle East 777 1,177
 Israel 381 111
 Saudi Arabia 290 (D)
 United Arab Emirates 65 -36
 Other 41 (D)

Asia and Pacific 12,659 17,568
 Australia 2,190 7,167

 China 260 673
 Hong Kong 1,141 3,022
 India 50 247
 Indonesia 53 2,424
 Japan 7,132 1,938
 Korea, Republic of 533 48
 Malaysia 343 -13
 New Zealand 32 (D)
 Philippines 223 203
 Singapore 519 91
 Taiwan 101 185
 Thailand 49 391
 Other 33 (D)

International(1) ... 1,252

Addenda:
 Eastern Europe(2) -23 1,319
 European Union (15)(3) 40,124 34,003
 OPEC(4) 904 (D)

(*) Less than $500,000 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(1.) "International" consists of affiliates that have operations spanning more than one country and that are engaged in petroleum shipping, other water transportation, or offshore oil and gas drilling.

(2.) "Eastern Europe" comprises Albania, Armenia, Azerbaijan, Balarus, Bulgaria, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, Tajikistan, Turkmenistan, Ukraine, and Uzpekistan.

(3.) The European Union (15) comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(4.) OPEC is the Organization of Petroleum Exporting Countries. Its members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

The USDIA position increased $118.6 billion, or 12 percent, in 1999, less than the 16-percent increase in 1998 but in line with the 12-percent average increase in the preceding 3 years. The growth in the position reflected reinvested earnings and the global boom in mergers and acquisitions.

Acquisition activity by U.S. direct investors was below the unusually high level of 1998, but it remained strong. Rising equity markets and the continued expansion of the U.S. economy increased the wealth of U.S. investors, enhancing their ability to fund acquisitions. Additionally, the appreciation of the U.S. dollar against several European currencies made acquisitions in these countries less expensive for U.S. investors in dollar terms. Relatively favorable economic conditions in the United Kingdom and Canada (where a substantial portion of the acquisition activity took place) increased the attractiveness of direct investments in these countries.

Several large acquisitions in retail trade, in automobile and automobile parts manufacturing, and in telecommunications resulted from industry-specific factors. Acquisitions in retail trade reflected a mature retail market in the United States and attractive opportunities to capture market share overseas through, for example, distribution efficiencies and price competition. The acquisitions in automobile manufacturing, some of which were made through holding companies in finance (except depository institutions), insurance, and real estate ("FIRE"), were part of a wave of consolidations in the global automobile industry.(3) U.S. investors also made acquisitions in automobile parts (in transportation equipment manufacturing), where pressure from carmakers to cut prices has squeezed profit margins and led to consolidations. In telecommunications, rapidly changing industry dynamics--brought about by new technologies and deregulation--and a desire to achieve economies of scale led to acquisitions of foreign communications companies.

Among the foreign affiliates that were sold to foreign firms in 1999, the largest were in tobacco products and in communications.

The following table shows the change in position in 1999 by the type of capital flow and valuation adjustment:

[Billions of dollars]

Total 118.6
 Capital outflows 138.5
 Reinvested earnings 57.3
 Equity capital 52.1
 Increases 80.7
 Decreases 28.6
 Intercompany debt 29.2
 Valuation adjustments -19.9
 Currency translation -12.5
 Other -7.4

Capital outflows for USDIA were $138.5 billion in 1999. By account, the largest share of the outflows--41 percent--was accounted for by reinvested earnings. Net equity capital outflows accounted for 38 percent of outflows. Intercompany debt accounted for the remainder.

Reinvested earnings, at $57.3 billion, were up 61 percent from 1998. The sharp rise resulted primarily from an increase in the share of earnings that were reinvested (rather than distributed to owners) from 40 percent to 56 percent. The increase in reinvested earnings also reflected a 13-percent rise in the overall earnings of foreign affiliates. More than half of the rise in affiliate earnings was accounted for by affiliates in the Asia and Pacific area--particularly in Japan and Hong Kong; the rest was mostly accounted for by affiliates in Canada. The large increase by affiliates J n the Asia and Pacific area reflected improved economic conditions after the financial crisis of 1997-98 and the substantial appreciation of several Asian currencies, particularly the Japanese yen, against the U.S. dollar, which raised the value of the affiliates' earnings in dollar terms. The increase by affiliates in Canada reflected economic growth both in Canada and in the United States--Canada's largest export market. Despite recent growth in the number of affiliates in Europe, the earnings of European affiliates were flat in 1999, partly as a result of the appreciation of the U.S. dollar against the currencies of several major European countries--particularly those participating in the European Monetary Union (EMU).

Equity capital outflows, at $52.1 billion, were down 29 percent from the record level in 1998, reflecting fewer large acquisitions and some large selloffs. Acquisitions by U.S. parents and equity investments in existing foreign affiliates resulted in equity capital increases of $80.7 billion. (The increases mostly reflected the acquisitions discussed earlier.) These increases were partly offset by decreases in equity capital (which are recorded as U.S. capital inflows) of $28.6 billion, which resulted from selloffs of a number of foreign affiliates and--to a lesser extent--from the return of invested capital from existing foreign affiliates to their U.S. parents.

Intercompany debt outflows increased 16 percent, primarily reflecting debt repayment by parents to their foreign affiliates. The largest outflows were to Japan, the United Kingdom, Switzerland, and Singapore.

The capital outflows were partly offset by a $19.9 billion downward adjustment to the value of the position: nearly two-thirds of the adjustment was accounted for by negative currency-translation adjustments that resulted from the U.S. dollar's appreciation against several foreign currencies--particularly those of the EMU participants. In addition, acquisitions made for more than book value required downward adjustments to reconcile the purchase prices, which are reflected in capital outflows (and would otherwise determine the measured change in position), with the book values used in computing the historical-cost position. (See valuation adjustments in the box "Key Terms.")

Changes by country

Major changes in the position by area and by country are shown in the following table:

[Billions of dollars]

All countries 118.6
 Europe 53.7
 Of which:
 United Kingdom 20.4
 Netherlands 12.8
 Switzerland 11.1
 Asia and Pacific 30.5
 Of which:
 Japan 12.2
 Singapore 6.4
 Latin America and Other
 Western Hemisphere 22.7
 Of which:
 Panama 7.4
 Mexico 5.9
 Bermuda 5.6
 Canada 9.8

The position in Europe increased 10 percent and accounted for nearly half of the increase worldwide. Part of the increase for Europe was accounted for by holding companies. Holding companies are classified in FIRE, but their operating affiliates may be in other industries; additionally, the operating affiliates may be located in countries other than those of the holding companies.(4) Thus, the increases accounted for by holding companies reflected strong earnings and reinvested earnings by existing operating affiliates in several industries and countries and capital outflows to the holding companies that were used to finance acquisitions of new operating affiliates.

Within Europe, the United Kingdom had the largest increase, followed by the Netherlands and Switzerland. Most of the increase in the United Kingdom was in the form of equity capital and reflected acquisitions. U.S. parent companies are attracted to the United Kingdom because of its large, prosperous market and because of the similarity of its business culture, legal framework, and language to that of the United States; in addition, the United Kingdom is often used as an entry point for investing elsewhere in Europe. The largest acquisitions were in retail trade (in "other industries") and automobile parts (in transportation equipment manufacturing).

In the Netherlands, most of the increase in the position was accounted for by reinvested earnings, which were the highest of all countries. Reinvested earnings were concentrated among holding companies (in FIRE), reflecting the earnings of operating affiliates, many of them outside the Netherlands. The increase resulting from reinvested earnings was partly offset by a shift to equity capital inflows that resulted from selloffs.

The position in Switzerland increased 28 percent, reflecting reinvested earnings in FIRE and intercompany lending in wholesale trade.

The position in Asia and Pacific increased 20 percent. Japan and Singapore accounted for most of the increase. The position in Japan increased 34 percent, reflecting U.S. parent lending to affiliates in FIRE, acquisitions of affiliates in communications and wholesale trade, and positive currency translation adjustments. The position in Singapore also increased 34 percent, reflecting lending to affiliates in FIRE, repayment of debt to affiliates in industrial machinery, and the reinvested earnings of affiliates in electronic equipment.

The position in Latin America and Other Western Hemsiphere increased 11 percent. Panama, Mexico, and Bermuda accounted for most of the increase. In Panama, the increase largely reflected capital gains (which are recorded as valuation adjustments) in FIRE. The increase in Bermuda--also concentrated in FIRE--reflected reinvested earnings and capital contributions to existing affiliates. In Mexico, the increase mostly reflected the reinvested earnings of affiliates in several industries.

The position in Canada increased 10 percent. The increase reflected acquisitions of telecommunications companies and petroleum firms and the reinvested earnings of affiliates in several industries.

Foreign Direct Investment in the United States

The position of FDIUS valued at historical cost--the book value of foreign direct investors' equity in, and net outstanding loans to, their U.S. affiliates-was $986.7 billion at the end of 1999 (table 2 and chart 1). The largest positions remained those of the United Kingdom ($183.1 billion, or 19 percent of the total), Japan ($148.9 billion, or 15 percent), the Netherlands ($130.7 billion, or 13 percent), and Germany ($111.1 billion, or 11 percent) (table 4.2 and chart 3).

[Chart 3 OMITTED]

Table 4.2.--Foreign Direct Investment Position in the United States on a Historical-Cost Basis, 1999

[Millions of dollars]

 All Petro-
 industries leum

 All countries 986,668 55,940

Canada 79,716 2,836

Europe 685,845 49,642
 Austria 2,483 (D)
 Belgium 11,448 204
 Denmark 4,959 3
 Finland 4,816 (D)
 France 77,622 (D)

 Germany 111,138 173
 Greece 17,969 699
 Ireland 4,982 (D)
 Italy 135 0
 Luxembourg 54,894 (D)
 Netherlands 130,703 11,083

 Norway 4,201 1,240
 Spain 2,629 -6
 Sweden 17,904 (D)
 Switzerland 55,280 572
 United Kingdom 183,145 35,446
 Other 1,537 8

Latin America and Other 44,591 1,836
 Western Hemisphere

 South America and 10,606 -370
 Central America
 Brazil 651 (D)
 Mexico 3,612 -3
 Panama 5,898 13
 Venezuela -170 (D)
 Other 617 9

 Other Western Hemisphere 33,984 2,206
 Bahamas 2,163 (D)
 Bermuda 13,054 153
 Netherlands Antilles 2,695 607
 United Kingdom Islands, 13,883 1,247
 Caribbean
 Other 2,189 (D)

Africa 1,545 20
 South Africa 427 1
 Other 1,118 19

Middle East 7,087 868
 Israel 2,680 0
 Kuwait 3,391 (D)
 Lebanon -21 0
 Saudi Arabia 99 (D)
 United Arab Emirates 16 (D)
 Other 72 (D)

Asia and Pacific 167,884 737
 Australia 10,818 763
 Hong Kong 1,210 (D)
 Japan 148,947 165
 Korea, Republic of 1,520 (D)
 Malaysia -20 (*)
 New Zealand 329 0
 Philippines 116 (*)
 Singapore 1,049 (*)
 Taiwan 2,983 -4
 Other 932 -17

Addenda:
 European Union (15)(1) 624,807 47,831
 OPEC(2) 4,528 398

 Manufacturing

 Chemi-
 Food and cals and
 kindred allied
 Total products products

 All countries 391,013 16,717 103,465

Canada 26,270 610 2,286

Europe 306,543 13,716 93,358
 Austria 674 (D) (D)
 Belgium 3,972 1 3,195
 Denmark 956 194 9
 Finland 1,435 (D) (D)
 France 39,087 2,777 11,829

 Germany 59,303 98 20,236
 Greece 3,868 917 (D)
 Ireland 1,050 32 172
 Italy -1 -2 0
 Luxembourg 45,302 66 (D)
 Netherlands 42,922 1,745 15,833

 Norway 2,044 (D) 951
 Spain 1,014 15 -23
 Sweden 6,856 0 688
 Switzerland 27,814 1,453 15,824
 United Kingdom 68,242 6,195 21,973
 Other 1,000 (D) -13

Latin America and Other 6,028 962 751
 Western Hemisphere

 South America and 1,980 1,022 -390
 Central America
 Brazil -157 -14 -110
 Mexico 2,243 1,034 (D)
 Panama 89 1 (D)
 Venezuela -42 1 -27
 Other -154 1 -77

 Other Western Hemisphere 4,048 -61 1,141
 Bahamas 136 (D) 1
 Bermuda 862 -73 (D)
 Netherlands Antilles 1,268 (D) 1,055
 United Kingdom Islands, 1,789 -11 (D)
 Caribbean
 Other -6 18 -23

Africa -172 (D) (D)
 South Africa -103 (D) -6
 Other -69 5 (D)

Middle East 1,150 (D) (D)
 Israel 1,144 (D) (D)
 Kuwait 1 0 0
 Lebanon (D) 0 0
 Saudi Arabia -3 0 (*)
 United Arab Emirates -4 0 -3
 Other (D) 0 0

Asia and Pacific 52,195 1,483 6,310
 Australia 2,574 -145 276
 Hong Kong 484 (D) -2
 Japan 47,277 1,348 5,166
 Korea, Republic of 234 (D) (D)
 Malaysia 38 1 (*)
 New Zealand 20 3 (D)
 Philippines 15 -2 1
 Singapore 237 (D) -49
 Taiwan 1,257 1 913
 Other 60 (D) -52

Addenda:
 European Union (15)(1) 274,729 12,138 76,593
 OPEC(2) -29 1 -32

 Manufacturing

 Primary
 and Other
 fabricated Machin- manu-
 metals ery facturing

 All countries 21,808 76,584 172,440

Canada 3,832 5,109 14,433

Europe 12,576 54,183 131,710
 Austria (D) 150 318
 Belgium (D) (D) 518
 Denmark 0 363 392
 Finland (D) 129 623
 France 1,005 1,337 10,099

 Germany 2,003 7,188 29,778
 Greece (D) 654 2,147
 Ireland 293 63 490
 Italy (D) 5 (D)
 Luxembourg 428 (D) (D)
 Netherlands 1,345 8,353 15,647

 Norway (D) 354 66
 Spain (D) -1 (D)
 Sweden 334 3,545 2,290
 Switzerland 696 1,989 7,852
 United Kingdom 4,328 15,780 19,966
 Other 2 182 (D)

Latin America and Other 1,652 750 1,914
 Western Hemisphere

 South America and 1,479 -290 158
 Central America
 Brazil 30 -128 65
 Mexico (D) -66 141
 Panama (D) -3 -46
 Venezuela 0 -20 5
 Other 1 -73 -6

 Other Western Hemisphere 172 1,040 1,756
 Bahamas (D) 0 -2
 Bermuda 3 (D) 847
 Netherlands Antilles (D) (D) 169
 United Kingdom Islands, (D) 1,014 745
 Caribbean
 Other 2 (*) -3

Africa (D) -6 -361
 South Africa 0 -6 (D)
 Other (D) (*) (D)

Middle East (D) 530 155
 Israel (D) 522 153
 Kuwait 0 0 1
 Lebanon 0 (D) 0
 Saudi Arabia 0 -4 2
 United Arab Emirates 0 -1 0
 Other (D) (D) 0

Asia and Pacific 3,794 16,019 24,590
 Australia 551 623 1,270
 Hong Kong (D) 198 34
 Japan 3,116 14,572 23,075
 Korea, Republic of 4 74 89
 Malaysia 1 122 15
 New Zealand (D) 10 -5
 Philippines (*) 11 5
 Singapore (D) 212 45
 Taiwan (*) 270 72
 Other (D) 27 -11

Addenda:
 European Union (15)(1) 11,288 51,658 123,052
 OPEC(2) 0 -17 19

 Deposi-
 Whole- tory
 sale Retail institu-
 trade trade tions

 All countries 108,936 23,386 60,118

Canada 4,467 982 2,905

Europe 49,312 18,991 43,815
 Austria 425 (D) (D)
 Belgium 1,516 (D) (D)
 Denmark 3,617 7 (D)
 Finland (D) (D) (D)
 France 2,191 159 2,778

 Germany 10,013 2,149 15,073
 Greece 3,534 (D) (D)
 Ireland 292 1,299 1,199
 Italy 88 0 0
 Luxembourg 1,565 (D) 0
 Netherlands 6,659 (D) 14,257

 Norway 221 2 (D)
 Spain 160 82 1,177
 Sweden 4,656 7 -24
 Switzerland 2,386 888 (D)
 United Kingdom 8,751 4,820 3,322
 Other (D) 0 180

Latin America and Other 2,402 948 2,750
 Western Hemisphere

 South America and 328 113 1,868
 Central America
 Brazil 43 2 425
 Mexico 348 (D) 199
 Panama 56 3 108
 Venezuela 2 2 271
 Other -122 (D) 865

 Other Western Hemisphere 2,075 835 882
 Bahamas 511 (D) (D)
 Bermuda (D) 268 4
 Netherlands Antilles (D) (D) 113
 United Kingdom Islands, 1,552 330 587
 Caribbean
 Other (D) -12 (D)

Africa 426 22 41
 South Africa (D) 0 0
 Other (D) 22 41

Middle East 164 22 934
 Israel 174 (D) 848
 Kuwait 0 0 (D)
 Lebanon (*) -2 0
 Saudi Arabia (D) (D) 9
 United Arab Emirates 0 (D) (D)
 Other (D) -3 44

Asia and Pacific 52,155 2,419 9,673
 Australia -1 17 (D)
 Hong Kong 362 10 206
 Japan 49,454 2,345 7,478
 Korea, Republic of 1,205 33 36
 Malaysia 8 0 (D)
 New Zealand 138 (D) 0
 Philippines -19 0 142
 Singapore 234 (D) 114
 Taiwan 565 10 953
 Other 219 6 693

Addenda:
 European Union (15)(1) 46,427 18,102 40,239
 OPEC(2) 2 25 591

 Finance,
 except
 deposi-
 tory
 institu- Real
 tions Insurance estate

 All countries 52,133 101,760 44,720

Canada 10,718 9,712 9,925

Europe 18,630 78,355 13,252
 Austria (D) 1 7
 Belgium 2,465 1 46
 Denmark (D) -4 (D)
 Finland (D) 5 18
 France 5,093 4,827 (D)

 Germany -712 10,882 3,802
 Greece -49 5,930 40
 Ireland (D) 317 76
 Italy (D) 0 64
 Luxembourg 1,024 (D) 145
 Netherlands 3,578 30,577 5,754

 Norway (D) 1 41
 Spain (D) 162 (D)
 Sweden (D) (D) 990
 Switzerland 1,020 15,538 140
 United Kingdom 6,056 8,683 1,716
 Other 4 (D) 125

Latin America and Other 2,332 12,170 4,012
 Western Hemisphere

 South America and 709 (D) 81
 Central America
 Brazil (D) (D) -6
 Mexico (D) 1 57
 Panama 300 (D) 90
 Venezuela -2 7 -64
 Other (D) 11 4

 Other Western Hemisphere 1,623 (D) 3,932
 Bahamas (D) 0 371
 Bermuda 53 1,646 591
 Netherlands Antilles 11 -2 278
 United Kingdom Islands, (D) (D) 2,603
 Caribbean
 Other 23 (D) 88

Africa 494 (*) 168
 South Africa (D) 0 -6
 Other (D) (*) 173

Middle East 330 0 3,371
 Israel (D) 0 (D)
 Kuwait (D) 0 3,305
 Lebanon 0 0 (D)
 Saudi Arabia 2 0 38
 United Arab Emirates 1 0 11
 Other (D) 0 43

Asia and Pacific 19,629 1,523 13,992
 Australia 2,094 (D) 483
 Hong Kong (D) 1 175
 Japan 17,593 1,074 11,636
 Korea, Republic of 146 (D) 36
 Malaysia (D) 0 3
 New Zealand 0 (D) 102
 Philippines 0 -8 -2
 Singapore -26 (*) (D)
 Taiwan 15 9 33
 Other 5 (D) (D)

Addenda:
 European Union (15)(1) 17,619 62,782 13,130
 OPEC(2) (D) 7 3,331

 Other
 Services industries

 All countries 57,558 91,106

Canada 1,375 10,526

Europe 45,623 62,682
 Austria 26 -8
 Belgium 1,719 536
 Denmark 8 265
 Finland 20 (D)
 France 3,687 18,513

 Germany 4,509 5,948
 Greece 440 1,233
 Ireland 170 218
 Italy (D) 41
 Luxembourg 5,536 734
 Netherlands 5,958 (D)

 Norway 364 264
 Spain -12 62
 Sweden (D) 370
 Switzerland 3,134 (D)
 United Kingdom 16,651 31,257
 Other -10 -3

Latin America and Other 1,589 10,524
 Western Hemisphere

 South America and 283 (D)
 Central America
 Brazil -1 -22
 Mexico 229 440
 Panama (D) (D)
 Venezuela 1 (D)
 Other (D) -143

 Other Western Hemisphere 1,305 (D)
 Bahamas 305 106
 Bermuda 29 (D)
 Netherlands Antilles -6 98
 United Kingdom Islands, 992 (D)
 Caribbean
 Other 45 2

Africa 235 311
 South Africa (D) (D)
 Other (D) (D)

Middle East 145 104
 Israel 49 (D)
 Kuwait (D) (*)
 Lebanon 0 (*)
 Saudi Arabia (D) -9
 United Arab Emirates 0 6
 Other 12 (D)

Asia and Pacific 8,592 6,958
 Australia 334 4,118
 Hong Kong 51 -91
 Japan 7,995 3,729
 Korea, Republic of 1 -8
 Malaysia 125 -7
 New Zealand -6 23
 Philippines 0 -11
 Singapore 35 -879
 Taiwan 60 84
 Other -3 1

Addenda:
 European Union (15)(1) 42,165 61,764
 OPEC(2) (D) 98

[Billions of dollars]

Total 192.9
 Capital outflows 271.2
 Equity capital 212.1
 Increases 235.3
 Decreases 23.1
 Intercompany debt 40.2
 Reinvested earnings 18.8
 Valuation adjustments -78.2
 Currency translation -5.2
 Other -73.0

Capital inflows for FDIUS were a record $271.2 billion in 1999 (the previous record was $181.8 billion in 1998). Most--78 percent--of the inflows were net inflows of equity capital ($212.1 billion). The rest were intercompany debt inflows ($40.2 billion) and reinvested earnings ($18.8 billion).

Equity capital inflows--the net of equity capital increases and equity capital decreases--reached a record $212.1 billion, 40 percent higher than the previous record of $151.7 billion in 1998. Equity capital increases--at $235.3 billion--reflected the acquisitions of U.S. businesses by foreigners and additional equity contributions to existing U.S. affiliates. These increases were partly offset by equity capital decreases of $23.1 billion, which reflected selloffs of affiliates by, and returns of capital to, foreign direct investors (transactions that are recorded as U.S. capital outflows).

Intercompany debt inflows were a record $40.2 billion, up from $30.7 billion. More than a third of the inflows were from parents in Luxembourg and were used to finance acquisitions in manufacturing.

Reflecting a sizable dropoff in distributions and a 58-percent increase in earnings, reinvested earnings shifted $19.5 billion to a record positive reinvested earnings of $18.8 billion.(8) The share of earnings that were reinvested was 53 percent. Earnings rose $13.1 billion; almost all of the rise was accounted for by affiliates in "other manufacturing," petroleum, and wholesale trade. The increases in "other manufacturing" and in petroleum partly reflected the earnings of U.S. companies that were acquired by foreign investors in late 1998 (and thus did not significantly affect affiliate earnings until 1999). In wholesale trade, the increase primarily reflected growth in the earnings of Japanese-owned affiliates. Losses--and thus negative reinvested earnings--occurred in "other industries" and finance.

The capital inflows were partly offset by a substantial downward adjustment--$78.2 billion--to the value of the position; the adjustment was primarily related to acquisitions. As is usually the case, the acquired firms were purchased by foreign direct investors for more than their book values: In 1999, transaction values were boosted by high valuations in the communications-related sectors of the U.S. equity markets and by substantial premiums, in relation to preacquisition market prices, that foreign investors paid for many of the acquired firms. The downward adjustment reconciled the transaction values of the acquisitions, which are reflected in capital inflows (and would otherwise determine the measured change in position), with the smaller book values that are recorded in the historical-cost position.

Changes by country

Most--82 percent--of the $192.9 billion increase in the FDIUS position in 1999 was accounted for by affiliates with parents in Europe. Within Europe, the largest dollar increase was in the position of parents in the United Kingdom, followed by the positions of parents in the Netherlands, Luxembourg, France, and Germany. After Europe, the largest increases were by parents in Latin America and Other Western Hemisphere, in Asia and Pacific, and in Canada. The increase in position by parents in Latin America and Other Western Hemisphere was concentrated in Bermuda and in U.K. Islands, Caribbean. The increase in position by parents in Asia and Pacific was more than accounted for by Japan. Major changes in the positions by area and by country are shown in the following table:

[Billions of dollars]

All countries 192.9
 Europe 157.2
 Of which:
 United Kingdom 40.0
 Netherlands 31.8
 Luxembourg 28.2
 France 19.6
 Germany 16.7
 Latin America and Other Western
 Hemisphere 16.7
 Of which:
 Bermuda 9.3
 U.K. Islands, Caribbean 4.9
 Asia and Pacific 11.9
 Of which:
 Japan 14.4
 Canada 5.6

The position of parents in the United Kingdom increased 28 percent. A substantial portion of the increase was accounted for by one very large transaction--the acquisition of a wireless communications company by a British firm in the same industry; partly reflecting this acquisition, the United Kingdom's position in "other industries" more than doubled.(9) Partly due to acquisitions of communications equipment firms, the United Kingdom's position in machinery manufacturing more than tripled. Substantial reinvested earnings of affiliates in petroleum, which partly reflected increased profits resulting from higher oil prices, also raised the position of the United Kingdom.

The position of parents in the Netherlands increased 32 percent; the increase mostly reflected acquisitions of insurance companies and of depository institutions. The position of Luxembourg parents more than doubled, reflecting acquisitions in manufacturing by existing affiliates ultimately owned by investors in other countries.(10) The acquisitions were financed through loans to the U.S. affiliates as well as through equity capital.

The position of French parents increased 34 percent, primarily reflecting acquisitions of companies that provide products or services related to water purification. The position of German parents increased 18 percent; the increase reflected acquisitions of depository institutions, communications firms, and air freight companies. Germany's position was also boosted by reinvested earnings in manufacturing.

The position of parents in Bermuda more than tripled, and that of parents in the U.K. Islands, Caribbean increased 54 percent. Both increases reflected acquisitions by firms ultimately owned by investors in other countries. These acquisitions included telecommunications and Internet services firms and property and casualty insurance companies.

The position of parents in Japan increased 11 percent. The increase primarily reflected lending to affiliates and valuation adjustments; Japanese investments in new U.S. affiliates remained well below their peak levels of the late 1980's. By industry, the largest increase was in wholesale trade.

The position of Canadian parents increased 8 percent. By industry, increases in "other manufacturing," finance, and insurance were partly offset by decreases in food.

Key Terms

The key terms used in this article are described in this box. For a more detailed discussion of these terms and the methodologies used to prepare the estimates, see Foreign Direct Investment in the United States: 1992 Benchmark Survey, Final Results (Washington, DC: U.S. Government Printing Office, 1995) and U.S. Direct Investment Abroad: 1994 Benchmark Survey, Final Results (Washington, DC: U.S. Government Printing Office, 1998). The methodologies are also available at BEA's Web site at <www.bea.doc.gov>.

Direct investment. Investment in which a resident of one country obtains a lasting interest in, and a degree of influence over the management of, a business enterprise in another country. In the United States, the criterion used to distinguish direct investment from other types of investment is ownership of at least 10 percent of the voting securities of an incorporated business enterprise or the equivalent interest in an unincorporated business enterprise.

U.S. direct investment abroad (USDIA). The ownership or control, directly or indirectly, by one U.S. resident of 10 percent or more of the voting securities of an incorporated foreign business enterprise or the equivalent interest in an unincorporated foreign business enterprise.

Foreign direct investment in the United States (FDIUS). The ownership or control, directly or indirectly, by one foreign resident of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or the equivalent interest in an unincorporated U.S. business enterprise.

Foreign affiliate. A foreign business enterprise in which a single U.S. investor (that is, a U.S. parent) owns at least 10 percent of the voting securities, or the equivalent.

U.S. affiliate. A U.S. business enterprise in which a single foreign investor (that is, a foreign parent) owns at least 10 percent of the voting securities, or the equivalent.

Ultimate beneficial owner (UBO). That person (in the broad legal sense, including a company), proceeding up the affiliate's ownership chain beginning with the foreign parent, that is not owned more than 50 percent by another person. The UBO ultimately owns or controls the affiliate and derives the benefits associated with ownership or control. Unlike the foreign parent, the UBO of a U.S. affiliate may be located in the United States.

Foreign parent group. Consists of (1) the foreign parent, (2) any foreign person, proceeding up the foreign parent's ownership chain, that owns more than 50 percent of the person below it, up to and including the UBO, and (3) any foreign person, proceeding down the ownership chain(s) of each of these members, that is owned more than 50 percent by the person above it. (For FDIUS, the term "parent" in the definitions below refers to both the foreign parent and other members of the foreign parent group.)

Direct investment capital flows. Funds that parent companies provide to their affiliates net of funds that affiliates provide to their parents. For USDIA, capital flows also include the funds that U.S. direct investors pay to unaffiliated foreign parties when affiliates are acquired and the funds that U.S. investors receive from them when affiliates are sold. Similarly, FDIUS capital flows include the funds that foreign direct investors pay to unaffiliated U.S. residents when affiliates are acquired and the funds that foreign investors receive from them when affiliates are sold. FDIUS capital flows also include debt and equity transactions between U.S. affiliates and other members of their foreign parent groups.

Direct investment capital flows consist of equity capital, intercompany debt, and reinvested earnings. Equity capital flows are the net of equity capital increases and decreases. Equity capital increases consist of payments made by parents to third parties for the purchase of capital stock when they acquire an existing business, as well as funds that parents provide to their affiliates that increase their ownership interest in the affiliates. Equity capital decreases are funds parents receive when they reduce their equity interest in existing affiliates. Intercompany debt flows result from changes in net outstanding loans and trade accounts between parents and their affiliates; they include loans by parents to affiliates and loans by affiliates to parents. Reinvested earnings are the parents' claim on the undistributed after-tax earnings of the affiliates.

Direct investment position. The value of direct investors' equity in, and net outstanding loans to, their affiliates. The position may be viewed as the parents' contributions to the total assets of their affiliates or as the financing provided in the form of equity (including reinvested earnings) or debt by parents to their affiliates. Financing obtained from other sources, such as local or foreign third-party borrowing, is excluded.

BEA provides estimates of the positions for USDIA and for FDIUS that are valued on three bases--historical cost, current cost, and market value. At historical cost, the positions are valued according to the values carried on the books of affiliates; thus, most investments reflect price levels of earlier time periods. At current cost, the portion of the position representing parents' shares of their affiliates' tangible assets (property, plant, and equipment and inventories) is revalued from historical cost to replacement cost. At market value, the owners' equity portion of the position is revalued to current market value using indexes of stock prices.

Valuation adjustments to the historical-cost position. Adjustments to account for the differences between changes in the historical-cost position, which are measured at book value, and direct investment capital flows, which are measured at transaction value. (Unlike the positions on a current-cost and market-value basis, the historical-cost position is not adjusted to account for changes in the replacement cost of the tangible assets of affiliates or in the market value of parent companies' equity in affiliates.)

Valuation adjustments to the historical-cost position consist of currency translation and "other" adjustments. Currency-translation adjustments are made to account for changes in the exchange rates that are used to translate affiliates' foreign-currency-denominated assets and liabilities into U.S. dollars. The precise effects of currency fluctuations on these adjustments depend on the value and currency composition of affiliates' assets and liabilities. Depreciation of foreign currencies against the dollar usually results in negative translation adjustments because it tends to lower the dollar value of foreign-currency-denominated net assets. Similarly, appreciation of foreign currencies usually results in positive adjustments because it tends to raise the dollar value of foreign-currency-denominated net assets.

"Other" adjustments are made to account for differences between the proceeds from the sale or liquidation of affiliates and their book values, for differences between the purchase prices of affiliates and their book values, for writeoffs resulting from uncompensated expropriations of affiliates, for changes in industry of affiliate or country of foreign parent, and for capital gains and losses (other than currency translation adjustments). These capital gains and losses represent the revaluation of the assets of ongoing affiliates for reasons other than exchange-rate changes, such as the sale of assets (other than inventory) for an amount different from their book value.

Table 3.1.--U.S. Direct Investment Position Abroad on a Historical-Cost Basis, 1998

[Millions of dollars]

 Manufac-
 turing
 All
 industries Petroleum Total

 All countries 1,014,012 92,964 294,129

Canada 101,871 13,573 41,780

Europe 528,113 33,824 150,714

 Austria 3,850 152 1,060
 Belgium 18,637 156 8,497
 Denmark 2,854 582 589
 Finland 1,695 40 994
 France 42,067 1,083 19,826

 Germany 46,405 3,245 22,219
 Greece 639 (D) 90
 Ireland 16,991 (D) 7,915
 Italy 16,008 (D) 8,309
 Luxembourg 14,524 (D) 2,563
 Netherlands 93,592 2,831 15,643

 Norway 7,015 3,801 841
 Portugal 1,476 (D) 359
 Spain 13,676 199 8,414
 Sweden 5,339 79 1,809
 Switzerland 40,144 5 5,197
 Turkey 1,074 82 594
 United Kingdom 192,663 18,372 43,633
 Other 9,465 1,665 2,163

Latin America and Other 200,477 8,275 49,627
 Western Hemisphere

 South America 74,254 5,541 30,872
 Argentina 12,834 677 3,800
 Brazil 38,195 1,728 22,760
 Chile 9,351 18 1,022
 Colombia 3,732 954 1,092
 Ecuador 1,017 577 196
 Peru 2,088 122 210
 Venezuela 5,729 1,298 1,802
 Other 1,308 167 189

 Central America 57,764 1,245 17,057
 Costa Rica 2,080 28 619
 Guatemala 405 134 189
 Honduras 117 (D) 190
 Mexico 28,396 (D) 15,891
 Panama 25,982 620 137
 Other 785 (D) 30

 Other Western Hemisphere 68,459 1,489 1,698
 Bahamas 160 58 81
 Barbados 950 82 5
 Bermuda 40,403 (D) 3
 Dominican Republic 653 (D) 371
 Jamaica 2,100 (D) 144
 Netherlands Antilles 4,372 (D) 27
 Trinidad and Tobago 1,005 703 54
 United Kingdom Islands, 18,203 306 (D)
 Caribbean
 Other 614 167 (D)

Africa 14,241 9,806 1,829
 Egypt 2,036 1,452 430
 Nigeria 1,788 1,559 55
 South Africa 2,312 (D) 855
 Other 8,105 (D) 489

Middle East 10,632 2,951 2,376
 Israel 2,922 41 2,191
 Saudi Arabia 4,276 272 154
 United Arab Emirates 687 277 80
 Other 2,747 2,361 -48

Asia and Pacific 155,364 22,546 47,803
 Australia 31,150 4,100 6,952
 China 6,481 938 3,785
 Hong Kong 18,421 598 3,292
 India 1,460 190 367
 Indonesia 7,916 5,019 203
 Japan 35,633 4,402 12,053
 Korea, Republic of 7,395 (D) 2,818
 Malaysia 5,743 833 3,705
 New Zealand 6,041 330 797
 Philippines 3,930 283 1,564
 Singapore 18,427 2,695 7,085
 Taiwan 6,262 49 3,450
 Thailand 5,383 1,211 1,732
 Other 1,123 (D) (*)

International(1) 33,151 1,990 ...

Addenda:
 Eastern Europe(2) 7,902 1,666 2,140
 European Union (15)(3) 470,416 28,271 141,920
 OPEC(4) 25,298 12,773 2,254

 Manufacturing

 Primary
 Food and Chemicals and
 kindred and allied fabricated
 products products metals

 All countries 35,074 79,868 18,776

Canada 4,997 7,989 3,128

Europe 16,431 50,041 11,256

 Austria 30 45 2
 Belgium 1,194 5,214 133
 Denmark 120 60 51
 Finland 11 309 (D)
 France 3,539 4,331 4,462

 Germany 1,035 2,619 2,016
 Greece -9 43 1
 Ireland 572 2,908 175
 Italy 806 3,124 97
 Luxembourg 2 0 (D)
 Netherlands 1,139 9,623 387

 Norway (D) 17 2
 Portugal 113 114 -5
 Spain 1,684 1,320 1,593
 Sweden 18 202 6
 Switzerland 47 2,911 172
 Turkey 211 59 (D)
 United Kingdom 4,840 16,661 1,879
 Other (D) 481 (D)

Latin America and Other 10,114 11,202 2,563
 Western Hemisphere

 South America 4,726 7,652 2,087
 Argentina 976 1,112 351
 Brazil 2,654 5,507 1,348
 Chile 162 294 209
 Colombia 302 352 (D)
 Ecuador (D) 70 (D)
 Peru 75 83 (D)
 Venezuela 479 190 124
 Other (D) 43 0

 Central America 5,348 2,532 (D)
 Costa Rica 87 135 20
 Guatemala 83 58 2
 Honduras 185 2 (*)
 Mexico 4,951 2,292 428
 Panama 32 28 10
 Other 10 16 (D)

 Other Western Hemisphere 40 1,018 (D)
 Bahamas 0 (D) 0
 Barbados 0 0 0
 Bermuda 0 0 0
 Dominican Republic 22 22 0
 Jamaica -5 141 0
 Netherlands Antilles (D) 0 0
 Trinidad and Tobago (*) 6 (D)
 United Kingdom Islands, 1 (D) (D)
 Caribbean
 Other (D) (D) 0

Africa 567 301 235
 Egypt (D) 32 5
 Nigeria (D) 19 -1
 South Africa 165 199 (D)
 Other 75 50 (D)

Middle East 75 88 44
 Israel 71 67 (D)
 Saudi Arabia 14 65 (D)
 United Arab Emirates 0 (D) (D)
 Other -9 (D) 0

Asia and Pacific 2,890 10,247 1,531
 Australia 830 2,494 424
 China 170 327 189
 Hong Kong 9 355 380
 India -40 106 -43
 Indonesia (D) 137 8
 Japan 777 3,133 322
 Korea, Republic of 379 529 28
 Malaysia 3 288 6
 New Zealand (D) 95 25
 Philippines 337 398 33
 Singapore 13 412 40
 Taiwan 51 1,680 45
 Thailand 109 316 70
 Other (D) -23 2

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 571 491 117
 European Union (15)(3) 15,093 46,573 10,852
 OPEC(4) 542 368 160

 Manufacturing

 Industrial Electronic
 machinery and other Transpor-
 and Electronic tation
 equipment equipment equipment

 All countries 31,348 32,398 33,939

Canada 2,915 2,138 10,057

Europe 18,516 11,704 13,066

 Austria 107 395 295
 Belgium 254 335 458
 Denmark (D) 209 -8
 Finland 3 (D) (D)
 France 2,492 892 928

 Germany 4,187 675 7,292
 Greece 0 9 0
 Ireland 122 1,382 15
 Italy 863 757 757
 Luxembourg 9 4 0
 Netherlands 1,007 1,372 310

 Norway 180 7 15
 Portugal (D) (D) 37
 Spain 167 984 1,685
 Sweden 187 114 (D)
 Switzerland 551 607 267
 Turkey 0 -17 99
 United Kingdom 8,025 3,337 981
 Other 361 17 58

Latin America and Other 2,966 2,957 7,700
 Western Hemisphere

 South America 1,595 2,464 4,233
 Argentina 445
 Brazil 1,530 23 3,190
 Chile 21 (D) (D)
 Colombia -7 24 (D)
 Ecuador 0 (D) 24
 Peru 1 0 0
 Venezuela -1 94 393
 Other 1 0 0

 Central America 1,373 (D) 3,466
 Costa Rica (D) 78 0
 Guatemala 0 0 0
 Honduras 0 0 0
 Mexico (D) (D) 3,466
 Panama 0 0 0
 Other 0 -15 0

 Other Western Hemisphere -1 (D) 0
 Bahamas -3 0 0
 Barbados 0 2 0
 Bermuda 0 3 0
 Dominican Republic 0 0 0
 Jamaica 0 0 0
 Netherlands Antilles 0 0 0
 Trinidad and Tobago 2 0 0
 United Kingdom Islands, 0 (D) 0
 Caribbean
 Other 0 0 0

Africa 58 87 161
 Egypt 13 (*) (D)
 Nigeria 0 0 (D)
 South Africa 43 75 (D)
 Other 2 12 (D)

Middle East 5 1,541 11
 Israel -16 1,539 (D)
 Saudi Arabia (D) 1 5
 United Arab Emirates (D) 0 0
 Other 16 0 (D)

Asia and Pacific 6,888 13,972 2,946
 Australia 636 165 1,041
 China 643 1,757 -8
 Hong Kong 244 1,206 29
 India 234 75 -61
 Indonesia -17 35 (D)
 Japan 997 1,944 1,653
 Korea, Republic of 322 554 119
 Malaysia 548 2,624 0
 New Zealand 15 35 0
 Philippines 13 599 0
 Singapore 2,328 3,651 176
 Taiwan 289 1,100 (D)
 Thailand 639 222 (D)
 Other -5 3 (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 361 -6 58
 European Union (15)(3) 17,423 11,090 12,626
 OPEC(4) -2 130 336

 Manufac-
 turing

 Other Deposi-
 manu- Wholesale tory
 facturing trade institutions

 All countries 62,725 70,014 40,582

Canada 10,557 7,376 1,199

Europe 29,702 39,073 23,874

 Austria 186 504 (D)
 Belgium 909 2,617 321
 Denmark (D) (D) (*)
 Finland 48 296 20
 France 3,182 2,720 1,688

 Germany 4,396 3,173 1,507
 Greece 46 93 155
 Ireland 2,741 276 (D)
 Italy 1,905 2,631 334
 Luxembourg (D) (D) 257
 Netherlands 1,806 7,799 93

 Norway (D) 229 (D)
 Portugal 25 344 239
 Spain 1,099 1,525 2,115
 Sweden (D) 298 (D)
 Switzerland 642 8,128 2,588
 Turkey (D) -18 224
 United Kingdom 7,909 7,000 10,491
 Other 557 400 (D)

Latin America and Other 12,104 6,840 3,429
 Western Hemisphere

 South America 8,114 1,999 4,782
 Argentina 667 423 1,840
 Brazil 6,199 517 1,662
 Chile 205 380 636
 Colombia 307 154 180
 Ecuador 61 66 21
 Peru (D) 102 54
 Venezuela 522 261 85
 Other (D) 96 304

 Central America 3,601 2,843 844
 Costa Rica (D) (D) 0
 Guatemala 46 26 5
 Honduras 3 2 5
 Mexico 3,421 989 699
 Panama 68 (D) (D)
 Other (D) 25 18

 Other Western Hemisphere 389 1,999 -2,198
 Bahamas (D) 98 -1,551
 Barbados 4 189 (D)
 Bermuda 0 1,122 0
 Dominican Republic 327 22 (D)
 Jamaica 9 (D) 1
 Netherlands Antilles (D) (D) 5
 Trinidad and Tobago (D) 20 (D)
 United Kingdom Islands, 1 315 -769
 Caribbean
 Other 3 (*) 7

Africa 421 204 338
 Egypt (*) 28 163
 Nigeria 0 1 (D)
 South Africa 281 111 (D)
 Other 140 64 (D)

Middle East 612 296 850
 Israel 509 (D) 0
 Saudi Arabia 52 (D) 687
 United Arab Emirates (D) 112 (D)
 Other (D) 1 (D)

Asia and Pacific 9,330 16,225 10,892
 Australia 1,361 2,210 2,585
 China 706 222 127
 Hong Kong 1,068 4,319 1,766
 India 95 93 402
 Indonesia (D) (D) 186
 Japan 3,226 3,823 551
 Korea, Republic of 887 638 2,243
 Malaysia 235 183 393
 New Zealand (D) 245 (D)
 Philippines 183 157 288
 Singapore 466 2,786 735
 Taiwan (D) 487 611
 Thailand (D) 1,003 485
 Other (*) (D) (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 548 238 313
 European Union (15)(3) 28,261 30,334 19,560
 OPEC(4) 719 479 1,160

 Finance
 (except
 depository
 institu-
 tions),
 insurance,
 and real Other
 estate Services industries

 All countries 375,965 60,696 79,663

Canada 22,860 4,783 10,300

Europe 214 000 37,377 29,251

 Austria (D) 203 -31
 Belgium 4,748 2,365 -67
 Denmark (D) 151 54
 Finland (D) 70 (r)
 France 9,689 5,094 1,967

 Germany 12,153 2,082 2,025
 Greece 128 46 (D)
 Ireland 7,170 1,103 (D)
 Italy 882 2,448 (D)
 Luxembourg 11,089 37 17
 Netherlands 59,154 7,220 852

 Norway 1,549 309 (D)
 Portugal 262 122 (D)
 Spain 515 548 361
 Sweden 1,500 1,059 (D)
 Switzerland 22,268 1,519 438
 Turkey (D) 57 (r)
 United Kingdom 79,208 12,844 21,116
 Other (D) 100 1,335

Latin America and Other 103,899 6,972 21,436
 Western Hemisphere

 South America 13,689 3,334 14,038
 Argentina 3,533 905 1,858
 Brazil 5,173 1,777 4,577
 Chile 3,634 201 3,461
 Colombia 807 59 486
 Ecuador 86 4 67
 Peru 279 32 1,288
 Venezuela 64 327 1,891
 Other 112 28 412

 Central America 29,362 1,725 4,689
 Costa Rica (D) (*) (D)
 Guatemala 12 5 34
 Honduras 29 0 (D)
 Mexico 4,946 (D) 4,589
 Panama (D) (D) (D)
 Other (D) 8 (D)

 Other Western Hemisphere 60,848 1,914 2,710
 Bahamas 1,306 117 51
 Barbados 308 313 (D)
 Bermuda 37,788 1,277 (D)
 Dominican Republic (*) (D) 105
 Jamaica 6 39 1,648
 Netherlands Antilles 4,299 (D) (*)
 Trinidad and Tobago (D) 1 (D)
 United Kingdom Islands, 16,677 114 (D)
 Caribbean
 Other (D) 35 (D)

Africa 627 178 1,257
 Egypt 0 -48 13
 Nigeria (D) 0 4
 South Africa 245 168 (D)
 Other (D) 59 (D)

Middle East 2,300 428 1,430
 Israel 389 (D) (D)
 Saudi Arabia 1,621 270 (D)
 United Arab Emirates (D) 71 (D)
 Other (D) (D) (D)

Asia and Pacific 32,278 10,957 14,663
 Australia 6,222 2,299 6,782
 China 795 44 570
 Hong Kong 4,604 997 2,844
 India 343 38 26
 Indonesia 207 58 (D)
 Japan 8,649 5,785 370
 Korea, Republic of 23 453 (D)
 Malaysia 352 276 (*)
 New Zealand 3,491 36 (D)
 Philippines 1,204 199 234
 Singapore 4,419 627 79
 Taiwan 1,449 77 138
 Thailand 452 39 461
 Other 661 28 31

International(1) ... ... 1,325

Addenda:
 Eastern Europe(2) 2,221 17 1,307
 European Union (15)(3) 187,688 35,392 27,252
 OPEC(4) 2,257 787 5,588

 All Petro-
 industries leum

 All countries 793,748 51,729

Canada 74,143 2,526

Europe 528,601 48,008
 Austria 1,969 (D)
 Belgium 10,966 (D)
 Denmark 3,312 5
 Finland 4,106 (D)
 France 58,051 (D)

 Germany 94,404 138
 Greece 12,484 739
 Ireland 4,143 (D)
 Italy 109 0
 Luxembourg 26,650 93
 Netherlands 98,926 11,400

 Norway 3,833 (D)
 Spain 2,285 -3
 Sweden 15,139 (D)
 Switzerland 48,403 243
 United Kingdom 143,465 30,069
 Other 654 11

Latin America and Other 27,854 917
 Western Hemisphere

 South America and Central America 9,819 -693
 Brazil 905 (D)
 Mexico 2,432 -8
 Panama 6,504 (D)
 Venezuela -529 (D)
 Other 778 10

 Other Western Hemisphere 18,034 1,611
 Bahamas 2,077 (D)
 Bermuda 3,740 182
 Netherlands Antilles 2,844 (D)
 United Kingdom Islands, 9,009 506
 Caribbean
 Other 363 (D)

Africa 862 3
 South Africa 121 2
 Other 741 (*)

Middle East 6,346 925
 Israel 2,084 -3
 Kuwait (D) (D)
 Lebanon -19 0
 Saudi Arabia (D) (D)
 United Arab Emirates 43 -11
 Other -102 0

Asia and Pacific 155,943 1,350
 Australia 12,883 780
 Hong Kong 1,578 (D)
 Japan 134,590 734
 Korea, Republic of 974 (D)
 Malaysia 100 (D)
 New Zealand 337 0
 Philippines 93 (*)
 Singapore 1,561 -11
 Taiwan 3,144 -2
 Other 683 -22

Addenda:
 European Union (15)(1) 475,725 44,637
 OPEC(2) 4,132 113

 Manufacturing

 Chemi-
 Food and cals and
 kindred allied
 Total products products

 All countries 334,898 22,026 95,662

Canada 26,507 4,402 2,425

Europe 251,750 15,734 85,933
 Austria 360 (D) (D)
 Belgium 4,068 3 3,173
 Denmark 831 180 19
 Finland 1,262 (D) (D)
 France 38,087 2,538 13,919

 Germany 54,392 141 18,052
 Greece 2,674 896 (D)
 Ireland 918 -51 182
 Italy (D) -1 0
 Luxembourg (D) 206 (D)
 Netherlands 38,041 2,731 11,311

 Norway 1,938 (D) 929
 Spain 728 19 9
 Sweden 7,335 0 801
 Switzerland 24,253 2,360 14,978
 United Kingdom 54,765 6,520 21,337
 Other 389 47 -6

Latin America and Other 4,351 643 1,038
 Western Hemisphere

 South America and Central America 1,159 1,069 -201
 Brazil -178 -11 (D)
 Mexico 1,315 1,082 -107
 Panama 165 1 (D)
 Venezuela -23 (*) -12
 Other -126 -3 -62

 Other Western Hemisphere 3,192 -426 1,238
 Bahamas 147 (D) 1
 Bermuda 219 -22 (D)
 Netherlands Antilles 788 (D) 1,004
 United Kingdom Islands, 2,054 6 (D)
 Caribbean
 Other -16 -3 -11

Africa -92 (D) (D)
 South Africa -85 (D) -2
 Other -7 4 (D)

Middle East 691 (D) (D)
 Israel 867 (D) (D)
 Kuwait 1 0 0
 Lebanon (D) 0 (D)
 Saudi Arabia -6 0 0
 United Arab Emirates -2 0 -2
 Other (D) 0 (D)

Asia and Pacific 51,691 1,294 5,793
 Australia 2,142 -67 247
 Hong Kong 385 (D) -8
 Japan 47,347 1,158 4,671
 Korea, Republic of 15 (D) 54
 Malaysia 54 2 1
 New Zealand 23 7 -2
 Philippines 11 -2 1
 Singapore 243 (D) -39
 Taiwan 1,454 -1 928
 Other 16 (D) -58

Addenda:
 European Union (15)(1) 225,196 13,276 70,032
 OPEC(2) -651 (*) -15

 Manufacturing

 Primary
 and
 fabricated Machin-
 metals ery

 All countries 19,340 62,067

Canada 3,274 5,327

Europe 11,840 35,590
 Austria (D) 142
 Belgium (D) (D)
 Denmark (*) 359
 Finland (D) 110
 France 1,753 10,839

 Germany 2,790 6,738
 Greece (D) 381
 Ireland 278 41
 Italy -9 4
 Luxembourg 501 (D)
 Netherlands 1,299 6,065

 Norway (D) 304
 Spain (D) 5
 Sweden 592 3,644
 Switzerland 401 1,483
 United Kingdom 2,223 4,571
 Other (*) 266

Latin America and Other 503 771
 Western Hemisphere

 South America and Central America 236 -236
 Brazil (D) -100
 Mexico 68 -58
 Panama (D) -10
 Venezuela (*) -14
 Other 2 -53

 Other Western Hemisphere 267 1,007
 Bahamas (D) 0
 Bermuda (D) (D)
 Netherlands Antilles 2 (D)
 United Kingdom Islands, (D) 981
 Caribbean
 Other 2 -1

Africa (D) -14
 South Africa 0 -14
 Other (D) (*)

Middle East (D) 333
 Israel (D) 509
 Kuwait 0 0
 Lebanon 0 (D)
 Saudi Arabia 0 -7
 United Arab Emirates (*) -1
 Other -1 (D)

Asia and Pacific 3,741 19,060
 Australia 546 581
 Hong Kong (D) 183
 Japan 3,127 17,600
 Korea, Republic of -42 -32
 Malaysia 1 39
 New Zealand (D) 5
 Philippines 0 12
 Singapore (D) 217
 Taiwan 1 437
 Other (D) 19

Addenda:
 European Union (15)(1) 10,833 34,535
 OPEC(2) (*) -21

 Manu-
 facturing

 Other Whole-
 manu- sale Retail
 facturing trade trade

 All countries 135,803 89,980 21,090

Canada 11,079 4,216 988

Europe 101,653 45,513 16,723
 Austria 108 393 (D)
 Belgium 599 1,096 735
 Denmark 582 1,871 8
 Finland 273 1,799 115
 France 9,038 2,426 21

 Germany 26,871 9,226 2,504
 Greece 1,298 3,433 (D)
 Ireland 467 329 609
 Italy (D) 56 0
 Luxembourg (D) 1,326 (D)
 Netherlands 16,635 5,755 7,098

 Norway 38 161 2
 Spain (D) 151 84
 Sweden 2,299 4,350 (D)
 Switzerland 5,031 2,307 258
 United Kingdom 20,115 10,692 4,265
 Other 81 139 (D)

Latin America and Other 1,397 2,109 909
 Western Hemisphere

 South America and Central America 290 283 16
 Brazil 22 -30 1
 Mexico 330 451 5
 Panama -58 -104 3
 Venezuela 3 -2 2
 Other -7 -32 5

 Other Western Hemisphere 1,107 1,826 893
 Bahamas 4 474 (D)
 Bermuda 35 213 307
 Netherlands Antilles 163 (D) (D)
 United Kingdom Islands, 907 820 38
 Caribbean
 Other -3 (D) (D)

Africa -293 98 17
 South Africa (D) (D) 0
 Other (D) (D) 17

Middle East 164 157 23
 Israel 162 156 (D)
 Kuwait 1 0 0
 Lebanon 0 (*) -2
 Saudi Arabia 2 0 (D)
 United Arab Emirates 0 0 (D)
 Other 0 1 -3

Asia and Pacific 21,803 37,887 2,430
 Australia 836 -37 14
 Hong Kong 26 413 11
 Japan 20,791 35,462 2,331
 Korea, Republic of (D) 844 (D)
 Malaysia 11 22 0
 New Zealand (D) 176 (D)
 Philippines (*) -4 (*)
 Singapore 48 299 4
 Taiwan 89 595 (D)
 Other -31 117 7

Addenda:
 European Union (15)(1) 96,520 42,856 16,463
 OPEC(2) -19 4 25

 Finance,
 except
 Deposi- deposi-
 tory tory
 institu- institu-
 tions tions Insurance

 All countries 43,804 45,895 77,785

Canada 2,664 7,874 7,624

Europe 25,547 16,817 63,117
 Austria (D) (D) 1
 Belgium (D) 2,108 2
 Denmark (D) (D) -4
 Finland (D) -46 (D)
 France 2,598 5,140 4,715

 Germany 5,644 1,673 10,196
 Greece (D) -203 1,799
 Ireland 1,089 (D) (D)
 Italy 0 4 0
 Luxembourg 0 116 (D)
 Netherlands 7,089 3,451 16,855

 Norway (D) -5 2
 Spain 1,111 -75 168
 Sweden (D) (D) 831
 Switzerland (D) 1,232 15,021
 United Kingdom 3,382 2,933 12,266
 Other 11 4 (*)

Latin America and Other 3,728 2,013 5,620
 Western Hemisphere

 South America and Central America 2,802 428 (D)
 Brazil 680 (D) (D)
 Mexico 75 26 2
 Panama (D) 290 (D)
 Venezuela 260 -1 6
 Other (D) (D) 11

 Other Western Hemisphere 925 1,585 (D)
 Bahamas (D) (D) 0
 Bermuda 5 -21 597
 Netherlands Antilles (D) 21 -2
 United Kingdom Islands, 642 (D) (D)
 Caribbean
 Other 3 24 (D)

Africa 47 445 0
 South Africa 0 (D) 0
 Other 47 (D) 0

Middle East 904 201 0
 Israel 793 (D) 0
 Kuwait (D) (D) 0
 Lebanon 0 0 0
 Saudi Arabia (D) 2 0
 United Arab Emirates (D) 1 0
 Other 48 -5 0

Asia and Pacific 10,913 18,545 1,423
 Australia 157 (D) (D)
 Hong Kong 224 (D) 1
 Japan 8,803 1,651 991
 Korea, Republic of 35 (D) (D)
 Malaysia (D) (D) 0
 New Zealand (D) 0 (D)
 Philippines 102 0 -6
 Singapore 118 -3 (*)
 Taiwan 857 20 7
 Other 600 5 2

Addenda:
 European Union (15)(1) 22,912 15,581 48,095
 OPEC(2) 595 (D) 6

 Real Other
 estate Services industries

 All countries 43,558 41,271 43,741

Canada 9,080 1,491 11,171

Europe 11,869 29,861 21,396
 Austria 7 (D) -1
 Belgium 49 1,420 (D)
 Denmark (D) 10 316
 Finland 15 13 (D)
 France (D) 2,034 2,552

 Germany 3,002 5,750 1,878
 Greece 33 358 1,347
 Ireland 72 (D) 213
 Italy 42 (D) 37
 Luxembourg (D) 3,236 (D)
 Netherlands 5,561 2,273 1,405

 Norway 44 (D) 204
 Spain 48 (D) (D)
 Sweden 924 950 343
 Switzerland 230 2,150 (D)
 United Kingdom 1,452 11,055 12,284
 Other 111 (D) -1

Latin America and Other 4,057 1,261 2,888
 Western Hemisphere

 South America and Central America 190 109 (D)
 Brazil (D) -4 23
 Mexico 54 173 340
 Panama 148 -45 342
 Venezuela (D) (D) (D)
 Other 6 (D) -9

 Other Western Hemisphere 3,867 1,152 (D)
 Bahamas 385 309 108
 Bermuda 594 40 1,606
 Netherlands Antilles 331 -45 114
 United Kingdom Islands, 2,652 715 308
 Caribbean
 Other -94 134 (D)

Africa 115 116 114
 South Africa (D) (D) -1
 Other (D) (D) 115

Middle East 3,297 138 10
 Israel (D) 54 15
 Kuwait 3,222 (D) (*)
 Lebanon (D) 0 (*)
 Saudi Arabia (D) (D) -4
 United Arab Emirates 12 0 (D)
 Other 42 11 (D)

Asia and Pacific 15,139 8,404 8,161
 Australia 744 (D) 9,285
 Hong Kong 204 323 12
 Japan 12,688 7,564 2,152
 Korea, Republic of 46 15 2
 Malaysia 74 130 -8
 New Zealand 71 -4 23
 Philippines -2 0 -8
 Singapore 1,303 12 -404
 Taiwan 35 53 (D)
 Other -24 (D) (D)

Addenda:
 European Union (15)(1) 11,881 27,431 20,874
 OPEC(2) 3,290 71 (D)

(*) Less than $500,000 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(1.) The European Union (15) comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(2.) OPEC is the Organization of Petroleum Exporting Countries. Its members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

Acknowledgments

The data for the U.S. direct investment position abroad were drawn from BEA's quarterly survey of transactions between U.S. parent companies and their foreign affiliates. The survey was conducted under the supervision of Mark W. New, assisted by Howard S. Chenkin, Jennifer C. Chilzer, Laura A. Downey, Javier J. Hodge, Marie K. Laddomada, Sherry Lee, Leila C. Morrison, and Dwayne Torney. Computer programming for data estimation and tabulation was provided by Marie Colosimo.

The data for the foreign direct investment position in the United States were drawn from BEA's quarterly survey of transactions between U.S. affiliates of foreign companies and their foreign parents. The survey was conducted under the supervision of Gregory G. Fouch, assisted by Peter J. Fox, Michelle L. Granson, Tracy K. Leigh, Watthana Lim, Beverly E. Palmer, Christine L. Perrone, and Linden L. Webber. Computer programming for data estimation and tabulation was provided by Karen E. Poffel, assisted by Neeta B. Kapoor and Fritz H. Mayhew.

(1.) The current-cost and market-value estimates are discussed ion "The International Investment Position of the United States" in this issue.

(2.) For a discussion of the profitability of U.S. affiliates, see Raymond J. Mataloni, Jr., "An Examination of the Low Rates of Return of Foreign-Owned U.S. Companies," SURVEY OF CURRENT BUSINESS 80 (March 2000):55-73.

(3.) The acquisitions made by holding companies were financed by capital outflows from the U.S. parents to the holding companies.

(4.) Transactions between U.S. parents and their foreign affiliates that enter the U.S. international transactions accounts and the related positions are classified according to the countries and industries of the affiliates with which the U.S. parents had direct transactions--in this case, those of the holding companies. However, when the direct transaction is with a holding company, the transaction may create indirect claims on, or liabilities to, affiliates in other countries and industries, or provide a channel for income to flow from the indirectly held affiliate to the parent. In contrast, the financial and operating data on foreign affiliates (for example, total assets, sales, and employment) are classified by the country of location and industry of operation of each affiliate. For the most recent financial and operating data for U.S. parents and their foreign affiliates, see "U.S. Multinational Companies: Operations in 1998" in this issue.

(5.) See Ned G. Howenstine and Rosaria Troia, "Foreign Direct Investment in the United States: New Investment in 1999," SURVEY 80 (June 2000): 55-63. According to the preliminary data from BEA's survey of new foreign direct investments, total outlays to acquire or establish U.S. businesses, including those financed by capital inflows from foreign parents, were up 31 percent to $282.9 billion in 1999 after tripling in 1998. These data cover only transactions involving U.S. businesses newly acquired or established by foreign direct investors and include financing other than that from the foreign parent, such as local borrowing by existing U.S. affiliates. In contrast, the changes in the FDIUS position reflect transactions of both new and existing U.S. affiliates with their foreign parents or other members of the foreign parent group and valuation adjustments, and exclude financing not provided by the foreign parent group.

Notwithstanding these differences, the two types of data are related. Any outlays to acquire or establish U.S. businesses that are funded by foreign parent groups are part of capital inflows for FDIUS, a component of the change in the position. Data from the new investments survey indicate that foreign parent groups funded $226.9 billion, or 80 percent, of outlays to acquire or establish new U.S. affiliates in 1999, compared with $159.8 billion, or 74 percent, in 1998.

(6.) These industry classifications are based on the 1987 Standard Industrial Classification (SIC). In the article on new foreign direct investments, the data on acquisitions and establishments by foreign investors in 1999 are presented using new classifications derived from the 1997 North American Industry Classification System (NAICS); under the NAICS-based classifications, many of the communications-related investments are included in the sector "Information." (See Howenstine and Troia, "New Investment in 1999.") In coming years, BEA will begin publishing the FDIUS and USDIA position and related capital-flow and income data on a NAICS basis.

(7.) The outflows were recorded as foreign securities transactions rather than as U.S. direct investment abroad because the exchanges of stock did not result in any single U.S. investor owning as much as 10 percent of the shares of the foreign firms.

(8.) Reinvested earnings were negative in 1998, because the affiliates' distributions to their foreign parents exceeded their current earnings.

(9.) The International Investment and Trade in Services Survey Act prohibits BEA from disclosing information from its direct investment surveys in a manner that allows the data supplied by an individual respondent to be identified. The act also provides that with the written consent of the respondent, information supplied by the respondent may be disclosed.

(10.) BEA also prepares data on the FDIUS position by country of ultimate beneficial owner; me data are included in the detailed tables on FDIUS that are usually published in the September SURVEY.