Emerging markets are expected to attract $1.06 trillion in foreign direct investment, portfolio flows and bank flows this year, with China taking the lion's share, according to the latest estimates released by the International Finance Institute (IFC) on Thursday.

The International Institute expects developing countries to see $500 billion in FDI, including $374 billion in portfolio investments and $191 billion in bankflows.

According to Sergei Lanao, deputy chief economist at the International Finance Institute, China will receive just under 40% of all expected flows.

"We believe that capital flows in emerging markets in 2021 will not be as strong as they were late last year," Lano said in a note.

Improving the growth of emerging markets will be an attractive factor for flows as well as high commodity prices, he said, adding that strong growth across developed markets has been positive, although financial conditions seemed less favourable.

Portfolio flows to emerging markets excluding China slowed to $75 billion in the first three months of this year, compared to $230 billion in the fourth quarter of 2020.

Emerging markets are countries in the process of rapid growth and development with low individual incomes and less mature capital markets than developed countries, including countries such as Brazil, Russia, India, China and Italy. It is developing countries that have not experienced any significant growth in their economy because of adherence to traditional growth practices such as agriculture.