E-paper
        

Prime

China's FDI to help US growth

Updated: 2011-05-05 10:41

By Li Xing and Tan Yingzi (China Daily)

Twitter Facebook Myspace Yahoo! Linkedin Mixx

WASHINGTON - Political fear mongering about Chinese direct investment in the United States could cause the US to miss out on employment and investment opportunities, American scholars said.

The warning was sent by scholars on Wednesday in the form of a recent study on Chinese foreign direct investment (FDI) in the US. Entitled An American Open Door? - Maximizing the Benefits of Chinese Foreign Direct Investment, the study shows that increases in China's direct investment in the US in the coming decade will help with economic growth and job creation in the country.

Over the past two years, the value of Chinese FDI assets in the US has grown 130 percent annually, said Daniel Rosen, an economist and one of the two authors of the study.

He and economist Thilo Hanemann estimate that in 2010 alone, Chinese investments in the US amounted to $5 billion.

By combining data from professional databases, media reports and industry contacts as well as documenting real-time Chinese investments, they show that Chinese firms have opened businesses in at least 35 states and created some 10,000 jobs.

Profitability is the essential motive behind the Chinese investment, Rosen said, adding that Chinese firms are likely to "place some $1 trillion to $2 trillion in direct investments around the world over the coming decade".

Stapleton Roy, former US ambassador to China, said that the study offers "informed basis for potential controversy that tends to rise as China shifts its global posture from being a net absorber of FDI to a major provider of FDI, a trend that has begun to emerge in the last few years".

The study has "brought together the best factual bases for understanding both positive aspects of Chinese FDI in the US and potential risks that exist with FDI in advanced countries", said Roy, who is director of Kissinger Institute on China and the United States at the Woodrow Wilson International Center for Scholars, which co-sponsored the study with the Asia Society Center on US-China Relations.

The two authors addressed the national security issue that has aroused outcries particularly in the US Congress, saying that the US should continue its screening through the Committee on Foreign Investment in the US (CFIUS), a group headed by the Treasury department with members coming from defense and intelligence departments.

While Rosen defended CFIUS' role, he did admit that Huawei's continued failures in major mergers and acquisitions in the US along with other much publicized cases has "already planted seeds of mistrust among Chinese entrepreneurs and Chinese firms that are considering operating in the US or Germany or Canada and someplace else".

The flow of investment from China to the US constitutes "one of the fundamental changes in US-China relations", said Orville Schell, director of the Asia Society Center on US-China Relations.

Schell said the US "will suffer" if it cannot find ways to "be as open to Chinese capital as we are to other firms", even with national security issues considered.

China Daily

Specials

The song dynasty

There are MORE THAN 300 types of Chinese operas but two POPULAR varieties are major standouts

Sino-US Dialogue

China and the US hold the third round of the Strategic and Economic Dialogue from May 9-10 in Washington.

Building communities

American architect John Portman and his company have developed more than 30 projects across China.

Refreshingly beautiful
V-Day parade
Revolutionary marriage