U.S. and China to remain top recipients for foreign investments.

• Author: Heffes, Ellen M.
• Position: INVESTMENTS

Over the next five years, the United States and China are expected to remain prime destinations for foreign direct investment, as global corporations continue to expand their investments in emerging economies in a quest for access to new customers and favorable operating conditions. This is one finding of KPMG International's Global Corporate Capital Flows study, which surveyed more than 300 chief financial officers, chief investment officers and other senior executives from the largest multinational companies, private equity and sovereign wealth funds in 15 major economies.

Survey results also show that the U.S. is expected to remain the leader in in-bound investment for 2008-09, with 27 percent of respondents anticipating "significant investment;" followed by China, at 17 percent; the United Kingdom, at 14 percent; and Germany, at 13 percent.

By 2014, China is predicted to edge out the U.S., at 24 percent; followed by the U.S., at 23 percent; Russia, at 19 percent; and India, at 18 percent.

Shaun Kelly, vice chair-Tax at KPMG LLP in the U.S., says, "The survey confirms that the world's leading organizations recognize that investing in the U.S. offers them opportunities to access its broad customer base, stable political environment and well-established infrastructure."

In addition, he says that "as the global economy continues to develop, shifts to investment in emerging economies will eventually create opportunities to grow and expand."

India is projected to experience the largest growth in its share of foreign investment across all sectors, and should become the world leader for investment in manufacturing. European economies are expected to keep...