Chinese invest billions in US
Despite fears from US politicians and companies about jobs being outsourced to China, Chinese investment in the United States has created 80,000 jobs for Americans, up from fewer than 15,000 five years ago, and the number could reach 200,000 to 400,000, according to a report released on Wednesday.
Chinese companies invested almost $46 billion in the US between 2000 and 2014, creating more than1,500 businesses in the country, and the amount could increase to between $100 billion to $200 billion by 2020, said the study sponsored by the National Committee on US-China Relations and done by the Rhodium Group. The report is the first detailed analysis of Chinese investment by congressional district.
“What was a trickle has become a stream, and it’s probably going to become a river,” said Stephen Orlin, president of the US-China Relations committee, a non-profit that promotes understanding between the US and China, at briefing in New York where the report was released.
“Chinese capital is providing 80,000 jobs today, and will likely provide between 200,000 and 400,000 jobs at the end of this decade. It will change the way many Chinese and Americans think about each other,” he added.
The top states for Chinese investments are California, Texas. North Carolina, Illinois and New York, according to the study. Between 2000 and 2014, North Carolina’s fourth congressional district received the most direct investment — $3.36 billion — followed by the seventh district in Illinois with $3.21 billion, and the 12th district in New York with $2.25 billion.
As for employment by Chinese companies, North Carolina is No 1, with 15,000 jobs. The state has a significant number of people employed by Smithfield Foods, which was bought by a Chinese food company two years ago in a controversial acquisition. Smithfi headquarters is in Virginia, and it has production facilities throughout the country.
The second-largest employer in North Carolina is Hong Kong-based Lenovo. In 2005, Lenovo acquired IBM’s PC business including its operations in the Research Triangle.
The report said that investments in perceived trophy assets such as the Waldorf Astoria Hotel dominate the headlines, but “Chinese firms are clearly interested in the value of American workers and manufacturing in some of the areas with the lowest per capita incomes in the United States as well. The benefits of Chinese capital are distributed worldwide, not just in high-income parts of the country.”
Chinese companies have created the most number of jobs in the manufacturing and services sectors, which hold a higher number of jobs compared to the energy and real estate sectors, the report said.
“Fears that Chinese acquirers could systematically move acquired assets and related jobs back to China have not materialized,” the authors said.
Thomasville, Alabama, is one of the cities that has benefited from Chinese investment and was profiled in the report. Last May, officials held a ribbon-cutting ceremony for Golden Dragon Precise Cooper Tube Group’s first US factory, located in Wilcox County and chosen among 70 US cities that expressed interested in having the plant.
“We had people in the town who were like, ‘The Chinese are coming, the Chinese are coming!’ they didn’t know how to act, they didn’t know how to accept this investment,” recalled Sheldon Day, mayor of Thomasville, during the event. “But when they found out that Alabamians — our folks — were going to be the people to receive the jobs, then it became a great project for us.”
Chinese investment spurs American innovation and competitiveness, the report found. Companies from China are spending millions on research and development in the US and “innovation clusters” in the US are benefiting. Tech giants like Tencent and Alibaba, for example, have contributed capital for US start-ups and early-stage growth companies.
“Higher levels of investment mark the beginning of an era of US-China economic engagement that brings a wider array of mutual benefits rather than a limited set of winners and losers, as arose from the deepening of goods trade of the past two decades,” the report said.