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Foreign Direct Investment into the Rest Of World...
China FDI investments now: $230 billion
China US FDI investment in 2010: $5 billion
China trade surplus with US in 2010: approx. $190 billion
This article makes it seem like the US is welcoming China with open arms to invest FDI - yet the discrepancy between available cash (US dollars in Chinese hands) and actual spending in the US is very telling given the very large amounts being spent elsewhere in the world.
http://www.sfgate.com/cgi-bin/articl...BUC11JFT5N.DTL
China FDI investments now: $230 billion
China US FDI investment in 2010: $5 billion
China trade surplus with US in 2010: approx. $190 billion
This article makes it seem like the US is welcoming China with open arms to invest FDI - yet the discrepancy between available cash (US dollars in Chinese hands) and actual spending in the US is very telling given the very large amounts being spent elsewhere in the world.
http://www.sfgate.com/cgi-bin/articl...BUC11JFT5N.DTL
Some data points from a recently released report on Chinese investment in the United States:
-- China's foreign direct investment worldwide will grow from $230 billion now to as much as $2 trillion by 2020.
-- Last year, China invested an estimated $5.3 billion in the United States, a number that is likely to grow exponentially.
-- China already has businesses in 35 of 50 states, employing more than 10,000 people. California has far and away the largest number - 55 - worth $824 million, though it is well behind Texas ($2.7 billion) in dollars.
"Chinese investment is arriving in increasingly larger amounts. Its impact on the United States will be highly beneficial economically," says the report, which has been making the rounds of policymakers and business executives from Washington to the Bay Area.
The 93-page study, produced for the Asia Society, is titled "An American Open Door? Maximizing the Benefits of Chinese Foreign Direct Investment."
Written by two economists at the Rhodium Group, a New York consultancy, it provides a comprehensive analysis of the forces pushing Chinese investments overseas, their changing focus and deployment in the United States. Worthwhile reading, especially for those of us at the "gateway to Asia" (sfg.ly/lKezaz).
But why the question mark? Apparently, "this surprising new volume of direct investment, which could help create thousands of American jobs, is giving rise to as much consternation as clapping in the United States."
More are worrying that political interference in deals "already is influencing the decisions of Chinese businesses, and it has fostered negative perceptions in China about U.S. investment openness."
"Political firestorm": Such concerns are featured prominently in the report's executive summary, its recommendations - "send a clear and bipartisan message that Chinese investment is welcome," "Washington must recapture the high ground," etc. - and in media pitches and presentations.
In a Wall Street Journal opinion piece Friday, for example, the report's authors, Daniel Rosen and Thilo Hanemann,write of Chinese investment "sparking a political firestorm in the U.S.," and warn ominously of a "bilateral investment shutdown."
Yet the report itself provides few concrete examples of such a firestorm, or deals actually blocked by them - except for the nixing of the China National Offshore Oil Corp.'s (CNOOC) takeover bid for Unocal in 2005 (which Chevron ultimately snapped up).
The firestorm appears not to have touched the 35 states in which China is invested, including Texas, where CNOOC paid $1.08 billion in 2010 for a one-third stake in a shale gas company "with little or no public comment."
In fact, the report found "U.S. policy to be generally well crafted, effective and fair to foreign investors: the record shows that the United States is, by and large, open to Chinese investment, and most deals proceed unhindered."
What's more, "recent surveys show that privately owned firms and small- and medium-sized businesses still perceive the United States as one of the most open and attractive countries for their investment," the report notes.
Neither does the Chinese government appear too unhappy. Around the same time the report came out, China Daily quoted a Ministry of Commerce official saying the United States, along with the European Union and Latin America, "will witness a rapid growth of investment from China" in the next three years.
Knocking at the Chinese door: Guest of honor at the report's unveiling in Washington on May 4 was the U.S. secretary of commerce, and soon-to-be ambassador to China, Gary Locke. His speech might not have been quite what the report's authors and sponsors gathered there had expected.
Yes, he began, citing the report, Chinese investment is a good thing. "It's a good thing for American workers. And it's a good thing for American businesses."
He went on: "Unfortunately, that is not the case for American companies operating in China, where they are frequently shut out of entire industries, or they are forced to give up proprietary information as a condition of operating in China.
"The imbalance of opportunity is a major barrier to continued improvement of the United States and China's commercial relationship. And it is part of a broader trend of China recently narrowing its commercial environment after a long and fruitful period of opening," he said.
Referring specifically to inbound foreign investment, Locke noted, "China has also recently announced a new review system to vet foreign investments based on vague national security parameters. Even more troubling, the review system allows for competitors and others outside of the Chinese government to influence the process by proposing to the Chinese authorities that a particular transaction be reviewed" (sfg.ly/kxx55V).
Perhaps, Locke was taking to heart recommendation No. 5 from the report: "Communicate to China its share of the burden."
The report does take note of the various criticisms leveled at China's policies, but it might have been better served had it highlighted them more, and questioned more forcefully how open China's door is.
-- China's foreign direct investment worldwide will grow from $230 billion now to as much as $2 trillion by 2020.
-- Last year, China invested an estimated $5.3 billion in the United States, a number that is likely to grow exponentially.
-- China already has businesses in 35 of 50 states, employing more than 10,000 people. California has far and away the largest number - 55 - worth $824 million, though it is well behind Texas ($2.7 billion) in dollars.
"Chinese investment is arriving in increasingly larger amounts. Its impact on the United States will be highly beneficial economically," says the report, which has been making the rounds of policymakers and business executives from Washington to the Bay Area.
The 93-page study, produced for the Asia Society, is titled "An American Open Door? Maximizing the Benefits of Chinese Foreign Direct Investment."
Written by two economists at the Rhodium Group, a New York consultancy, it provides a comprehensive analysis of the forces pushing Chinese investments overseas, their changing focus and deployment in the United States. Worthwhile reading, especially for those of us at the "gateway to Asia" (sfg.ly/lKezaz).
But why the question mark? Apparently, "this surprising new volume of direct investment, which could help create thousands of American jobs, is giving rise to as much consternation as clapping in the United States."
More are worrying that political interference in deals "already is influencing the decisions of Chinese businesses, and it has fostered negative perceptions in China about U.S. investment openness."
"Political firestorm": Such concerns are featured prominently in the report's executive summary, its recommendations - "send a clear and bipartisan message that Chinese investment is welcome," "Washington must recapture the high ground," etc. - and in media pitches and presentations.
In a Wall Street Journal opinion piece Friday, for example, the report's authors, Daniel Rosen and Thilo Hanemann,write of Chinese investment "sparking a political firestorm in the U.S.," and warn ominously of a "bilateral investment shutdown."
Yet the report itself provides few concrete examples of such a firestorm, or deals actually blocked by them - except for the nixing of the China National Offshore Oil Corp.'s (CNOOC) takeover bid for Unocal in 2005 (which Chevron ultimately snapped up).
The firestorm appears not to have touched the 35 states in which China is invested, including Texas, where CNOOC paid $1.08 billion in 2010 for a one-third stake in a shale gas company "with little or no public comment."
In fact, the report found "U.S. policy to be generally well crafted, effective and fair to foreign investors: the record shows that the United States is, by and large, open to Chinese investment, and most deals proceed unhindered."
What's more, "recent surveys show that privately owned firms and small- and medium-sized businesses still perceive the United States as one of the most open and attractive countries for their investment," the report notes.
Neither does the Chinese government appear too unhappy. Around the same time the report came out, China Daily quoted a Ministry of Commerce official saying the United States, along with the European Union and Latin America, "will witness a rapid growth of investment from China" in the next three years.
Knocking at the Chinese door: Guest of honor at the report's unveiling in Washington on May 4 was the U.S. secretary of commerce, and soon-to-be ambassador to China, Gary Locke. His speech might not have been quite what the report's authors and sponsors gathered there had expected.
Yes, he began, citing the report, Chinese investment is a good thing. "It's a good thing for American workers. And it's a good thing for American businesses."
He went on: "Unfortunately, that is not the case for American companies operating in China, where they are frequently shut out of entire industries, or they are forced to give up proprietary information as a condition of operating in China.
"The imbalance of opportunity is a major barrier to continued improvement of the United States and China's commercial relationship. And it is part of a broader trend of China recently narrowing its commercial environment after a long and fruitful period of opening," he said.
Referring specifically to inbound foreign investment, Locke noted, "China has also recently announced a new review system to vet foreign investments based on vague national security parameters. Even more troubling, the review system allows for competitors and others outside of the Chinese government to influence the process by proposing to the Chinese authorities that a particular transaction be reviewed" (sfg.ly/kxx55V).
Perhaps, Locke was taking to heart recommendation No. 5 from the report: "Communicate to China its share of the burden."
The report does take note of the various criticisms leveled at China's policies, but it might have been better served had it highlighted them more, and questioned more forcefully how open China's door is.