A spectre is haunting the global economic system.

"Phantom" foreign direct investment now accounts for 40 per cent of the global stock of foreign direct investment, or around US$15 trillion ($23.3t) in total, according to IMF research.

This capital, equivalent to the annual national income of China and Germany combined, plays no productive role in the economies which host it, instead it is moved around the world purely to reduce big companies' tax bills.


FDI statistics aim to capture when a company expands to a new country. It is defined as an investor taking at least a 10 per