chinadaily.com.cn
left corner left corner
China Daily Website

Do business, not politics

Updated: 2012-07-30 11:21
( China Daily)

"China is coming to town buying up America." Sensational and exaggerated as it is, such a portrayal of growing Chinese investment in the US reflects a reverse trend in investment between the two major economies.

A US investor investing in China no longer makes news, as it did 10 years ago. The latest deal in the spotlight is China's Dalian Wanda buying US movie theater chain AMC for $2.6 billion.

China's foreign direct investment in the US could cross a record $8 billion this year, according to research firm Rhodium Group's recent report. The rising investments will not only provide more business opportunities for Chinese firms, but also create more jobs for local people.

The amount of China's FDI in the US has long been small. But with its economic scale rising rapidly in recent years, more Chinese investors are eager to test the waters in other parts of the world, including the most powerful economy.

Regrettably, their efforts have often been blocked by non-business considerations. The example often cited is China National Offshore Oil Corporation's thwarted attempt to buy Unocal in 2005.

US security considerations on the back of political bias are often behind such moves. Chinese complaints aside, some US research institutions have warned that such willful security checks will discourage foreign investment. The result: Chinese investment in the US has been seriously disproportionate.

Despite the fast increase in China's US-bound investment, only 0.7 percent of FDI into the US came from China in 2011, while China's FDI in the US accounted for only 2.6 percent of its total outbound direct investment.

Moreover, the growth in China's investment in the US, at 44 percent, was much slower than that in Europe (101 percent) and Japan (more than three times).

Few would think that the US could afford to lose Chinese investment to Europe and its other competitors, especially in these turbulent times. China's outbound direct investment reached $60 billion in 2011 and by 2015, it could explode to $150 billion, according to official estimates.

Many US-based Chinese companies have created jobs, products and services, not raised security concerns, for local communities. That's why political considerations should yield place to rational thinking when it comes to investment.

 
8.03K
 
...
...
...