US again gets most Chinese funding
Updated: 2015-01-13 12:02
By Lian Zi in San Francisco(China Daily USA)
It was another good year for Chinese investment in the United States.
In 2014, there was a total of $17 billion in Chinese investment in the US, according to a report by the American Enterprise Institute-Heritage Foundation China Global Investment Tracker on Monday. That is $3 billion more than last year, according to the data.
The tracker follows Chinese investment and construction in the US, based oninformation released by Chinese companiesandtop business news wires, such as Dow Jones, according to Derek Scissors, resident scholar at the American Enterprise Institute in Washington.
"In total, there were 23 deals of $100 million or more taking place in 2014," Scissors told China Daily. "The biggest single spending outlay was Lenovo's acquisition of Motorola Mobility from Google for $2.91 billion."
Scissors said it is natural for the US to be the top recipient of Chinese investment, due to its size, resources and advanced economy.
In 2014, the hottest sector for Chinese investment in the US was real estate, Scissors said.
Even though Shanghai Greenland invested $3.5 billion in the Atlantic Yards, a 22-acre residential and commercial real estate project in Brooklyn, New York, in late 2013, investment accelerated in 2014, Scissors said.
However, the investments being made now in real estate are much riskier, said Scissors.
Chinese corporations made investments in the US real estate sector in 2009 that were well timed as prices were low. However, some parts of the US real estate market are quite expensive now, said Scissors.
It looks like some Chinese companies want to park their money in the US, because Chinese the real estate market is underperforming. Because US bonds have low returns, American property has becomes a popular investment vehicle for the Chinese, Scissors said.
The US has received $78 billion from Chinese investors since 2005. With$28 billion, New York state has drawn the most investment, but the large majority of that was initiated before 2012.
After 2012, Californiahas been the most popular destination for Chinese investment, the report said.
Chinese demand for resources and technology will be robust indefinitely, and the US has what China is looking for - land, technology and strong investor protection. It would not be surprising if Chinese investment in the US hit $20 billion in 2015, Scissors said.
"The transportation sector could see intense activity, though in construction rather than investment," Scissors said. "State Construction Engineering Corporation has won several American contracts so far, especially in light of the fact that Chinese companies are the biggest players globally."
Stanley Kwong, a professor at the University of San Francisco, also believes that Chinese investment in the US will grow.
"I am expecting an even higher percentage from China's private sector, especially consumer electronics, high tech, software, food technology and even manufacturing," said Kwong, who mentioned that Silicon Valley, California, has frequently seen investment made by Chinese venture capital firms.
"All of these trends are extremely positive on building China's image in the US," Kwong said. "The growth in US-China trade will definitely help consolidate the people-to-people relations between the two countries."