Chinese investments in US companies, almost nonexistent 15 years ago, now total nearly $ 50 billion and could reach $ 200 billion by the end of the decade, according to a new study tracking the trend of acceleration.
The increased energy and labor costs in China have helped drive the trend toward direct US investment by individuals and Chinese companies in the past five years, according to the study by global research firm Rhodium Group and the National Committee nonprofit US-China Relations.
Chinese investors have bought or 1,583 largest US companies created 15 years through December we now employ 80,600 full-time workers after a fivefold increase in the last five years.
California was the top destination for Chinese investors put $ 5.9 billion into nearly 370 companies offering some 8,300 jobs, mainly in the metropolitan areas of Los Angeles and San Francisco.
The rapid increase investment pales in comparison to three decades of much larger capital flows from the United States in China's manufacturing and direct investments of US companies in China are still far from those made by a number of other countries.
However, Chinese buying and start-ups should deepen ties in a way that only purchases of foreign products cannot do, said Stephen A. Orlins, president of the National Committee.
"The investment brings people together. Trade, not so much," he said. That is an easier argument to make Alabama a mayor or a governor in California that many politicians in Washington, said Thilo Hanemann, research director of rhodium.
On Wednesday, Mayor Sheldon Day of Thomasville, Ala., Is scheduled to describe a press conference in New York in the study of how Golden Dragon Precise Copper Tube Group helped revive the depressed region of muddy roads, pine forests and closed textile and furniture factories. The company, based in China's Henan Province, built a manufacturing plant for $ 100 million employing 300 workers.
Moreover, Chinese investors have been largely welcomed the new and existing firms.
In West Los Angeles, more than 1,000 employees, called troublemakers, work online game production Riot Games, the creator of the popular "League of Legends" game. Chinese Internet company Tencent Holdings Ltd. bought a majority stake in the company in 2011 for $ 250 million.
In eastern Virginia, Shuanghui International Holdings of Hong Kong spent $ 4700000000 two years ago to buy Smithfield Foods Inc., the largest US pork producer with 3,700 employees just in the state at the time.
In Chico, Calif., Chinese e-commerce giant Alibaba Group is employing 130 people in its US online retailer budding, 11 Main Inc.
Jeffrey Towson, a professor of investment Peking University, said the Chinese direct investment activity issuer is still in its relative infancy. As China's economy slows and tries to curb excess investment in ports, roads and other infrastructure, state enterprises in sectors such as railways and construction they are looking to go abroad.
"The government is giving a big boost to go international," he said. He cited China's recent offer for a proposed high-speed train in Mexico, which was initially approved, but later fell through.
China outbound investment began only in the 2000s, Towson, he said, until the last five years, almost all of it focused on natural, such as the acquisition of mining assets in areas such as Latin America resources. That is starting to change slowly, he said.
The study of rhodium is due to their desire to obtain a clearer picture of foreign investment in the US Its study does not have ongoing offers only completed transactions. It also tracks the money flows China said in Hong Kong, a semiautonomous Chinese city, to show how much it often ends in investments elsewhere.
The study included Chinese investments in real estate on a large scale, but not residential real estate - a hot market in California for Chinese millionaires - or construction projects, because those jobs are not permanent.
The Chinese are the largest foreign buyers of homes in the United States, spending $ 22 billion in residential real estate from April 2013 to March 2014, according to the National Association. of Realtors. About 51% of purchases were reported in California, Washington and New York.
The Ministry of Commerce of China reported that total foreign direct investment nation in 2013, the last year for which statistics are available, was $ 107.8 billion, making it the world's third largest after the US .S. and Japan.
But the US calculated outputs only $ 3.9 billion, only 3.6% of the total and 4.3% less than the previous year.
And according to US statistics, US companies and entrepreneurs have amassed about $ 6.35 trillion in total foreign direct investment over the much longer history such agreements, compared with China's $ 660,000,000,000. China still ranks behind Britain, Germany, France, Hong Kong and Japan in total accumulated direct investment, but is quickly moving into the ranks.
The Bureau of Economic Analysis Statistics show that China accounted for less than 1% of all foreign investment from 2010 to 2013. South Korea had more than twice the volume, Japan 13 times and Britain spent 18 times more buying business operations in the United States or from new ones.
These figures underestimate the outflow of mainland China, because certain investments through Hong Kong or other international destinations, Hanemann said rhodium is lost.
For example, counting only jobs full time underestimates the effect of deals as the Chinese conglomerate Dalian Wanda $ acquiring a majority stake in the cinema chain AMC Entertainment Holdings Inc. in Leawood, Kansas 2.6 billion. AMC at December 31 had about 900 full-time employees and 18,800 part-time, the company said in a recent regulatory filing.
Offers such as Hunan TV broadcast and recent agreement to provide a quarter of the expected $ 1.5 billion in production costs in the film studio Lionsgate in the next three years, are also excluded because as a society, the agreement does not result in a Chinese company owning more than physical assets in this country.
In fact, there are Chinese and US entertainment partnerships, mergers and acquisitions that can not meet the definition of rhodium in foreign direct investment, Pozil said Bennett, executive vice president of East West Bank.
"There is plenty to do, from the co-production investment in the project side, as well as associations, companies and investment in [mergers and acquisitions] side," said Pozil, which specializes in loans entertainment from US and Greater China.
Overall, the report said investment rhodium in California spans a wide range of industries, with a focus on high technology in San Francisco and Silicon Valley.
The Greater Los Angeles is a magnet for large real estate investments such as the purchase of Dalian Wanda the site of the former department store Robinsons-May in Beverly Hills and purchase of the Sheraton Universal Hotel and Los Angeles Marriott Downtown Shenzhen New World Group.
Downtown LA is also home to two major new mixed residential retail complex being built by Chinese developers, Metropolis project in Greenland Group and the central figure Oceanwide Real Estate Group, with a total investment of nearly $ 2 billion.
Whether China's total direct investment in the US waves up to $ 200 billion by the end of 2020 will depend in part on the slowdown in the booming economy of China. If it stagnates or shrinks, Chinese companies might slow or withdraw their investments in the US to shore up domestic operations, Orlins said the National Committee.