Because of its diversified industries — especially entertainment and tourism — Southern California has become the focus of the new round of investment from China.

In recent years, investment in real estate and hospitality in Southern California by Chinese companies has been in the billions, representing an "unprecedented scale", according to a new report — Chinese Companies Investing in Southern California-Real Estate and Hospitality — from the China Enterprise Council (CEC) issued last week.

Based on interviews with experts and more than 20 Chinese companies that have invested in hotel and real estate projects in the US, the report identifies trends and opportunities of the rapidly growing investment sector and offers insights and experience from Chinese companies that have navigated the challenges.

"As the US and China are committed to further strengthening economic ties, more and more Chinese companies are expected to expand their footprints in the US," said Sherman Zhang, president of CEC. "Chinese companies are growing very fast and stepping up as global investors."

Ever since Shenzhen New World Group Co acquired downtown Los Angeles Marriott Hotel for an estimated $60 million in 2010, Chinese companies have flooded into Southern California's hotel market.

In the years that followed, six major hotels have been acquired by Chinese companies, including the 2014 acquisition of the Los Angeles Airport Marriott by Sichuan Xinglida Group for $160 million.

With hotel acquisitions still in the spotlight, China's leading real estate developers have rushed into Southern California in a big way. In the past few years, Chinese firms, including Greenland, Oceanwide, Wanda, LT Global, Landsea, and Hazens, have closed deals worth hundreds of millions, and sometimes billions, of dollars, with more Chinese companies poised to buy and search for projects, said the report.

"The US will usher in a new wave of real estate development," Eleanor Chan, senior vice-president of commercial banking at HSBC USA, said in the report. "Real estate developers from China have entered the US market with a total investment of over tens of billions of dollars gradually since 2013, because of the relative saturation of that market in China and the attractiveness of the US.

"This trend has just begun, and we expect that this wave is far from reaching its top," she added.

The increased volume and scale of Chinese investment in prominent regions of the US has raised concerns that Chinese investments may face the same fate of the Japanese investment fever of the 1980s, which ended in losses after the bubble burst.

According to interviews conducted by CEC, such a fate could be avoided since most of the new Chinese investments are long-term ones driven by a development strategy to go global rather than short-term speculation aimed at profit only.