A recent report said China's Foreign Direct Investment (FDI) in the United States hit a record of over 15 billion U.S. dollars in 2015, yet hurdles to Chinese investment in the United States still exist. To keep the momentum and bring benefits to both, enhanced mutual trust and understanding are vital.
REASONS BEHIND CHINA'S INCREASING FDI IN U.S.
Chinese investment in acquisitions, new operations and expansions in the United States grew to more than 15 billion U.S. dollars in 2015, according to a report by the National Committee on U.S.-China Relations and Rhodium Group.
Innovation clusters, strong protection of intellectual property rights (IPR) and a well-established market environment in the United States are the major draws for investment from Chinese companies. With a strong dollar and an increased interest rate, the U.S. economy is expected to grow faster, which has made investment in the United States more alluring. The scale and maturity of the U.S. market are appealing to Chinese companies as well.
Conversely, China's growth model overhaul, lower political barriers for outbound investment and greater confidence are leading to a record capital flow to the United States.
Chinese investment in the United States will expose Chinese companies to Western standards of corporate governance, which is conducive to their development as well.
The time has gone when China acquired advanced technologies by providing markets. The country is now among the world's top high-end manufacturers in a wide range of industries, such as home appliances, glass, solar energy and cement; therefore, many Chinese companies are capable of investing in the United States, said Ye Meng, vice chairman of China General Chamber of Commerce-USA.
China's FDI in the United States is still relatively small, as its stock only accounts for less than one percent of the total FDI in the United States, leading to great potential for rapid growth.
With over 30 billion dollars already in pending deals and projects, 2016 is likely to be another record year for Chinese FDI in the United States, the report predicts.
