China Slips in Investor Confidence Rankings, Surpassed by Canada and Japan
Jakarta, CNBC Indonesia – The global investment landscape has transformed significantly over the past decade. Countries once seen as primary magnets for investors now face stiffer competition from others deemed more stable, with robust infrastructure, and prepared to embrace emerging trends such as artificial intelligence (AI).
This shift is evident in the rankings of the most trusted destinations for foreign investors in 2026. The United States (US) remains first, but competition below it intensifies.
Citing Visual Capitalist, the data comes from the Kearney 2026 Foreign Direct Investment Confidence Index, which identifies the most attractive destinations for foreign capital over the next three years. The survey involved 507 senior executives and compared 2016 and 2026 investment destination rankings.
China’s slide is stark. In 2016, it ranked second; by 2026, it dropped to fourth. Conversely, Canada surged. It was third in 2016 but rose to second in 2026, just behind the US. Japan also saw a sharp climb, moving from sixth in 2016 to third in 2026.
The data reveals a major realignment in global investor sentiment. Established economies remain top choices, but Gulf states such as the United Arab Emirates (UAE) and Saudi Arabia have entered the upper ranks. In 2026, the UAE ranked ninth and Saudi Arabia tenth, now comparable to major destinations like Germany and theUK.
Why has Canada overtakenChina? Canada is now the second most appealing destination for foreign investors. Factors include natural resource wealth, political stability, and growing AI infrastructure spending. In the first half of 2025, Canada recorded 297 new foreign direct investment (FDI) announcements, a record high. Canada’s technological innovation strength also appeals to investors, supported by a $926 million federal budget plan to build sovereign AI infrastructure.
Meanwhile, China faces investment pressure due to escalating geopolitical tensions, causing some investors to exercise caution. China remains a top global investment destination. Recently, countries like Canada and Kenya have explored new trade agreements with China amid shifting global economic dynamics.
Gulf states are increasingly attracting investors. Saudi Arabia’s rise is notable; it entered the top 25 in 2023 and broke into the top 10 in 2026 for the first time. Saudi Arabia aims to reduce reliance on oil and gas, targeting $100 billion in annual FDI by 2030. Technology is a key focus, with Amazon Web Services (AWS) planning a $5.3 billion investment in data centres in 2026, and Google Cloud collaborating with Saudi Arabia’s sovereign wealth fund to build AI facilities.
The UAE similarly attracts major tech investments from Microsoft, Oracle, and AWS. However, Middle East conflicts remain a risk; prolonged or escalating wars could dampen regional growth and investment flows.
The rankings show investors no longer solely chase rapid economic growth. They seek stability, strong infrastructure, strategic resources, and significant roles in global trade networks. Canada, Japan, Saudi Arabia, and the UAE have risen due to these combined strengths. Over the next decade, foreign investment will increasingly depend on a country’s ability to manage global risks, build future infrastructure, and offer long-term advantages.