Business / Economy

Chinese investment in US to remain bullish, says SelectUSA chief

(Xinhua) Updated: 2015-03-24 11:42

WASHINGTON -- Chinese investment in the United States has been rising rapidly in recent years and it will remain bullish in the future despite some friction, Vinai Thummalapally, executive director of the SelectUSA, told Xinhua in an interview.

"I'm very bullish about American companies doing business in China, and for Chinese companies to be doing business in the US," said the chief of the SelectUSA, a government-wide initiative aimed at encouraging, facilitate and accelerate international investment in the United States. It is part of the International Trade Administration of the US Commerce Department.

As for the challenges in the mutual trade, Thummalapally said: "There is no country on the planet that we have a perfect trading relationship ... (However) we see far more opportunities with China and with every other market than challenges."

Rising trade figures supported the view. "If you look at the last five years, the rate of growth of Chinese investment in US is the highest. It's growing at (compound average growth) rate of 41 percent," he said.

The US Commerce Department data showed that the foreign direct investment (FDI) from China to the US rose from $500 million in 2009 to $2.42 billion in 2013, and the figure peaked at $3.5 billion in 2012.

The number only accounts for a small fraction of the total FDI in the United States, but it showed that there is still huge potential for growth. The fact that China tops the list of delegations for the 2015 SelectUSA Investment Summit, which started on Monday, provides reason for optimism.

A total of 150 investors from the Chinese mainland and Hong Kong are attending the two-day summit, an event designed to encourage overseas businesses to operate in the United States and hosted by President Barack Obama this year. About 100 Chinese companies attended the inaugural summit in October 2013.

As for why Chinese companies chose to invest in the United States, Thummalapally cited the case of Fuyao Glass, one of China' s largest auto-glass makers, which invested nearly 360 million dollars to set up an automotive glass manufacturing facility in the US state of Ohio, creating 800 to 1000 local jobs.

Although the costs of making glass are lower in China, the Chinese company still made investment in the United States. The primary reason is that the Chinese manufacturer wants to be close to its customers, as many of its customers, including Ford, GM, BMW, Daimler, Toyota, Hyundai, Volkswagen, are doing businesses in the United States, Thummalapally said.

Moreover, Fuyao also saw the ease of delivering products in a very timely manner, the low costs of energy and the productivity of the workers, the director quoted Fuyao's chairman as saying.

The United States has been the world's largest recipients of FDI since 2006, and the government boasts its strength of capital markets, sound rule of law, the finest educational institutions, robust innovation sector, and low costs of energy in attracting foreign investment.

Chinese investors coming to the US have strong interests in entire spectrum of sectors from services to manufacturing, financial areas, pharmaceutical, automotive, and airspace industries, according to the SelectUSA.

A research report released by the consulting firm Rhodium Group showed, the information and communications technology sector in the United States attracted 48 percent of total FDI from China in 2014, and the second biggest sector was real estate. Auto, food, and pharmaceuticals and biotech were also important industries Chinese companies were interested in.

More than $3 billion of Chinese investment deals in the United States were pending or announced at the beginning of 2015, and a flurry of real estate developments across the United States has driven the number of multiyear greenfield projects to a new record high, with combined announced investments of more than $12 billion in coming years, said Rhodium Group.

The company expected the outbound investment by Chinese firms would continue to boom in 2015 and the US will remain a key market for them.

Hot Topics

Editor's Picks