Chinese Corporate Investment Rises in the United States | Financial Buzz

Chinese Corporate Investment Rises in the United States

According to the Rhodium Group, a record $45.6 billion was invested by Chinese companies in the United States of America in 2016. This happened even after China was blamed for everything by the Republicans during the presidential election campaign. It follows that there may be a dip in Chinese investment in 2017 after Donald Trump would be elected to the presidency. The group published that the yearly inflow of corporate acquisitions has shot to triple of what was during the 2015 levels. It is found that Chinese companies employed about 100,000 people in the US at that time.

Up in the Chinese money

This rising investment by the Chinese underlines the varying nature of economic relationships between China and the United States. US-headquartered multinational companies, for a number of years, have been constructing factories and pushing in money to make substantial investments in China. However, scant direct investment monies have come from the other side to the United States. This has held true even as China has kept trillions of dollars making up foreign exchange reserves within the US treasuries.

Such a holding pattern has led to a problem of balance. According to a study conducted in November by Rhodium, it is seen that American companies have invested approximately $228 billion in the Chinese economy from 2000. As per the Group’s latest report, total investment by China in the United States over an identical period has touched $109 billion. Most than 50 percent of the amount were invested in 2016.

Political developments

This increased investments in 2016 happened even though there was increased political scrutiny of investments by China in the corridors of Washington. Trump’s presidential campaign included a threat of trade wars with the Asian country. The now President-elect blamed China for loss of a number of industrial jobs in important American states. According to Rhodium analysts, the new uncertainty associated with the Trump administration, and more specifically his appointment of people who regards China with hostile eyes, means that companies from China will now be cautious of making huge investments. Trump’s new advisers are known to adopt a hawkish stance when it comes to China. Rhodium also said that Chinese companies continue to wait for the mandatory regulatory approval for its acquisitions calculated to be $21 billion. They have also committed in excess of $7 billion for future green field projects. Construction of such projects has not yet begun.

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