China's FDI in US shifts to real estate, manufacturing

Updated: 2014-07-26 04:56

By JACK FREIFELDER in New York(China Daily)

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China's foreign direct investment (FDI) in the United States in the first half of 2014 was slightly lower than in the first six months of last year, and the focus has shifted from acquisitions of assets to real estate, advanced services and manufacturing, a report said Friday.

"Investment … continues to boom as investors and developers are looking for risk diversification and new opportunities abroad," according to the report from the New York-based Rhodium Group. "[China's] interest in US assets continues to be strong, but the industry focus is shifting toward real estate, advanced services and manufacturing."

Though FDI for the first six months was lower than last year's first quarter, there is a "very strong pipeline for the second half," Rhodium said.

The report also noted a recent increase in the average amount spent by Chinese investors on real estate, advanced services and manufacturing, and an increased tendency for Chinese spending on greenfield investments, or previously undeveloped project sites.

Chinese investment in the US doubled to $14 billion in 2013, and investors have announced deals worth more than $10 billion in the first half of 2014 alone, according to Rhodium data.

Investment in the US high-tech sector formed the core of China's FDI through the first quarter of 2014 with the announcement of more than $6 billion in high-tech deals alone, according to the report.

"China's economic reform program is beginning to impact the country's global investment profile, with the changes also felt in the United States," the report said. "Economic reforms are also changing price structures for Chinese manufacturers, incentivizing greater investment in overseas R&D facilities, brands and local manufacturing capacity."

Significant deals made by Chinese investors earlier this year include Lenovo Group Ltd's acquisitions of IBM's x86 server unit ($2.3 billion) and Motorola Mobility ($2.91 billion) and the takeover of electric carmaker Fisker Automotive.