India, Africa, Europe missed 2010 FDI revival - UN

* Developed world gets less than half all FDI for first time

* FDI seen back at pre-crisis levels in 2011

* US, China were top recipients of FDI in 2010

* EU, Japan, India, Africa still in "FDI recession"

* Increase in non-equity expansion may dampen FDI growth

By Tom Miles

GENEVA, July 26 (Reuters) - Global foreign direct investment rose by 5 percent last year and should hit pre-crisis levels in 2011, according to a U.N. report published on Tuesday, but the revival is patchy, with Europe and India losing out.

Foreign direct investment (FDI) totalled $1.24 trillion in 2010 and should hit $1.4-1.6 trillion this year, advancing to $1.7 trillion in 2012 and $1.9 trillion in 2013, said the report, from UNCTAD, the U.N. trade and development agency.

The big winner was the United States, the world's top FDI destination, where a 50 percent collapse in FDI in 2009 was offset by a 49 percent bounce in 2010, when FDI into the United States totalled $228.3 billion, the report showed.

Investment into Europe and Japan continued drying up in 2010, and for the first time the developed world received less than half the total of global FDI, with many countries still in "FDI recession" despite the resumption of world trade.

"A gloomier economic outlook prompted by government austerity measures, looming sovereign debt crises and regulatory concerns were among the factors hampering the recovery of FDI flows in developed countries," the report said.

Flows to China, the second biggest FDI recipient, rose by 11 percent in 2010 to $105.7 billion.

"With continuously rising wages and production costs, however, offshoring of labour-intensive manufacturing to the country has slowed down, and FDI inflows continue to shift towards high-tech industries and services," the report said.

In contrast, Vietnam and Indonesia rose up the ranks of FDI destinations thanks to their low-cost manufacturing.

But flows into India fell by 31 percent to $24.6 billion, due to macroeconomic concerns and delays in the approval of large FDI projects, UNCTAD said. The value of FDI going to Africa and the least developed countries also continued to fall.

There are signs of a continued revival so far this year, since the value of the biggest FDI components -- greenfield investments and cross-border mergers and acquisitions (M&A) -- both increased in the first months of 2011, the report said.

That marks a turnaround from 2010, when greenfield investment fell and total FDI rose only on the strength of M&A.

OVERSEAS WITHOUT OWNERSHIP

Weaker global FDI does not necessarily mean companies are no longer expanding abroad -- they are just increasingly building international chains of production without actually owning the foreign assets, the report said.

Such arrangements, which include contract manufacturing, outsourcing and contract farming, generated more than $2 trillion in sales in 2010, much of it in developing countries, the report said.

Although such expansions do not ensure the same long-term commitments as FDI, they provide employment to 18-21 million workers globally and help to spread technology and skills in the developing world, according to UNCTAD.

The countries involved often reap only a fraction of the final sales price of the electronics, clothes, toys or other goods produced under such contracts, but the revenue can still equate to 10-15 percent of their economies, the report said.

Major contract manufacturers include electronics firms Foxconn International Holdings Ltd and Flextronics International Ltd , Chinese clothes maker Youngor Group Co Ltd , toy maker Kader Holdings Co Ltd and auto component producer Denso . (Reporting by Tom Miles; Editing by Ruth Pitchford)