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US is Second Hardest Market to Enter Despite Attractive Growth Opportunities, Say Global Business Leaders

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US comes in second, behind China - when firms asked about difficult markets US comes in second, behind China - when firms asked about difficult markets

* US remains number one destination for global inflows

* US ranks third globally for growth opportunities behind China and India

* North America second from bottom in economic influence league; Asia Pacific top

The US ranks third globally for growth opportunities behind China and India, but second behind China for perceived barriers to entry, according to a new global report by international legal practice Allen & Overy.

Allen & Overy conducted in-depth research among 1,000 business leaders from large international companies across 19 countries. The Opportunities and challenges report is the first report in the 50 Degrees East series looking at how Asia's rapid growth and development is expected to influence business decision making in the future.

When asked to identify the three markets that presented the best opportunities for growth for their business, 23% of respondents named the US, compared to 44% for China and 34% for India.

However, the US also came second only to China when firms were asked to identify the three most difficult markets to enter, with 19% picking the US compared to 21% for China. The regulatory environment is regarded as the main barrier to entry in both countries.

An analysis of investment flows showed that FDI inflows to the US were a world-leading $228.2 billion in 2010, compared to $324.6 billion in 2008 and $266.0 in 2007, while FDI outflows reached $329.9 billion in 2010, compared to $393.9 billion in 2008.

Portfolio inflows were $946.8 billion in 2009, lower than the previous peak in 2006 of $1.1 trillion, but much higher than the 2005 level of $433.5 billion. Portfolio outflows were $1.7 trillion in 2009, higher than the previous peak of $1.4 trillion in 2006.

In terms of threats to the global economy, fears about the Eurozone sovereign debt default were greater among businesses based in the US. More than half (52%) said this was their main concern, compared to only 36% of those based in Europe.

However, when it comes to economic influence, North America is surprisingly second from bottom, just above Europe but below South America, Africa and the Middle East. Asia Pacific is top of the rising economic influence league.

To view a copy of the full report or to find out more about the research methodology, please visit www.allenovery.com/50degreeseast.

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