Donald Trump’s administration has made it a priority to get US companies to invest in their home nation rather than deploying capital and sending jobs abroad. However, despite all of the rhetoric coming out of Washington, according to a recently published report from UBS’s Evidence Lab research arm, companies are still planning to make hefty investments or Foreign Direct Investment in emerging economies over the next year.

Analysts at the UBS Evidence Lab surveyed 500 corporate leaders during March and April this year to get their views on how their companies are positioning in the current economic and political environment. Of these 500 executives, 8% came from companies where revenue exceeded $2 billion while 54% worked at firms where revenue was less than $500 million. The bulk of the businesses originated from the tech sector.

India and US Foreign Direct Investment

Across all of the survey ‘buckets’, the proportion of executives who are planning to increase investment in the United States remained fairly constant at around 70% to 56%. Aside from the US, the most popular region for investment was China with 40% of companies with revenue of more than $2 billion planning incremental investment in the region during the next year. Around 13% of companies with revenue of less than $500 million are planning a similar move. The second most popular region is Japan followed closely by India. Surprisingly, within ASEAN, Malaysia was preferred.

India Set To Benefit From US Foreign Direct Investment

The fact that 40% of large companies are planning incremental investment in China over the next year, despite widely held concern over rising wages and other factors, shows that the region still is attractive for many international corporates.

What’s more, this shift could be hugely beneficial for China and India as over the past five years these regions have received just 2% of US foreign direct investment. The majority of foreign direct investment over the past five years has been aimed at Western Europe. That matters because over 80% of US FDI flows over the last five years can be explained by reinvested earnings – funds generated from the stock of existing FDI. Incremental investment plans to India may be more important than those of China given the relative size of its economy and the low share of US foreign direct investment stock.

Here are the key takeaways from these figures according to UBS:

 “We believe the preferences shown by larger US companies in the UBS Evidence Lab USA C-Suite survey for India, combined with the relative economic weight of that economy and the low share of the US FDI stock support the case for currency supporting capital inflows. However, these are likely to underpin the current exchange rate rather than drive it significantly higher against the US dollar. In Malaysia, conventional wisdom may underestimate the potential for foreign investment linkages to drive knowledge transfer and thus the trend pace of productivity growth.”