Posted On 2016/04/23 By In Business, Economics, News With 1034 Views

China’s growing Investment in US helping its Economy

Chinese investment in acquisitions, new operations and expansions in the United States hit a record 15 billion U.S. dollars in 2015 and is set to reach twice that this year, according to a recent report released by the National Committee on U.S.- China Relations, and the Rhodium Group.

Although Chinese-affiliated companies in the U.S. create jobs for Americans, they still prefer “a factory owned by an American company that employs 1,000 workers” than “a factory owned by a Chinese company that employs 2,000 workers,” a recent poll showed.

The bias is also evident in the ongoing U.S. presidential candidate elections, as many politicians from both sides have issued dire, but ill-founded, warnings about Chinese investment, and politicians have introduced bills that propose the clamping down on traditional U.S. openness to foreign direct investment (FDI).

The U.S. has long been sensitive about Chinese enterprises’ investment in its economy. China suffered the most investigations over the last three years despite its FDI in U.S. lagging far behind other countries.

The reason given by U.S. government is simple yet confusing: possible detriment to national security. However, the undefined principle is often used arbitrarily, which raises concerns of politicization.

However, Chinese investment is not “Trojan Horse” with hidden, ulterior purposes. Chinese enterprises are increasingly global-minded and eager to seek business opportunities in new markets, especially developed countries with advantageous technological conditions.

Their investment not only boosts employment and productivity, but also offers capital and markets for U.S firms’ further development. Rising two-way investment will help improve bilateral relations, which will actually contribute to each other’s national security.

Nevertheless, what Chinese investors constantly face in U.S. are unclear investigation principles and nontransparent and complex procedures, which are daunting, and have held back many deals, hampering market allocation of international resources.

The United States should live up to its reputation of openness and abandon this cold-war mentality when dealing with Chinese investment.

The U.S should pick up the pace in talks with China over the Bilateral Investment Treaty to honor commitments made last year such as offering open investment environment, equal treatment and more flexible measures in case of national security concerns.

The world economy, including China and the U.S. now faces much uncertainty, but one thing is for sure: Chinese outbound investment will continue to grow. It will be a mutually beneficial choice for all to embrace the inevitable trend in an open and fair manner.

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David Lee, educated in Denmark, China and the UK, gained extensive work experience with NGOs (Int"l Red Cross and UNESCO) as well as in the fields of training and education. He is part of BMG's China office and supports services like translation, localization, market research and analysis as well as social media planning and management. David also has in-depth insight into the Chinese travel, shopping and luxury market, paired with creativity, business acumen and a passion for Social Media.

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