Chi­nese in­vest­ment in US grow­ing

China Daily (Canada) - - FRONT PAGE -

of Com­merce.

Seven­teen man­u­fac­tur­ing projects in South Carolina have re­ceived a com­bined $1.3 bil­lion in in­vest­ment from China.

“When I helped with the $30 mil­lion project in­vest­ment by Haier Group back in 1999, which cre­ated 250 jobs, I thought it was a huge project,” Ling said.

Af­ter the South Carolina of­fice in Shang­hai was es­tab­lished in 2005, three or four po­ten­tial Chi­nese in­vestors were ar­rang­ing for field stud­ies in South Carolina a year and since 2010, the num­ber has in­creased to 15 to 20.

“Chi­nese in­vest­ment in the US has just started but will grow very fast in the fu­ture,” Ling said.

Ling be­lieves rapidly grow­ing costs in China have been a ma­jor fac­tor driv­ing Chi­nese in­vest­ment in the US, with com­pre­hen­sive costs in some places such as South Carolina in­creas­ingly com­pet­i­tive.

The costs of power, industrial land and lo­gis­tics in South Carolina, for ex­am­ple, are com­pet­i­tive.

The over­ca­pac­ity in some man­u­fac­tur­ing sec­tors in China is forc­ing Chi­nese com­pa­nies to seek their next growth ar­eas, Ling said, point­ing also to the grow­ing US mar­ket and pos­i­tive per­for­mance of the US econ­omy.

Po­ten­tial Chi­nese in­vestors in­clude those with a large pro­por­tion of en­ergy spend­ing in their to­tal costs and those with sig­nif­i­cant clien­tele in the US, he said.

The growth in Chi­nese in­vest­ment in the US is at­trib­ut­able to Chi­nese gov­ern­ment pol­icy en­cour­ag­ing in­vest­ment over­seas, the de­sire of some com­pa­nies to be­come in­ter­na­tional play­ers, and the need of some to sup­port their sup­ply chain in the US, said Matthew Koon, eco­nomic devel­op­ment lead with Trac­tus Asia, a con­sult­ing firm.

Apart from China’s go global strat­egy, the highly de­vel­oped high-tech­nol­ogy in­dus­try and sound po­lit­i­cal and busi­ness en­vi­ron­ment in the US are also driv­ing Chi­nese in­vest­ment in the US, said Ma Yao with mar­ket re­search firm CI Con­sult­ing.

Real es­tate, high-tech, en­vi­ron­men­tal tech­nol­ogy, fuel and Trea­sury bonds are at­tract­ing the at­ten­tion of po­ten­tial Chi­nese in­vestors, Ma said.

Devel­op­ment Ad­vi­sors, an­other con­sult­ing com­pany, has fa­cil­i­tated three Chi­nese-in­vested projects in the US, in the chem­i­cal, lum­ber mill and real es­tate sec­tors, said its pres­i­dent Pa­tric Zim­mer.

En­ergy, re­sources, in­for­ma­tion tech­nol­ogy and industrial ma­chin­ery are ex­pected to con­tinue to be key ar­eas for Chi­nese di­rect in­vest­ment in the US, although the ab­so­lute amounts in th­ese sec­tors may not stand out in the to­tal, said Wang Luyao, a post-doc­toral fel­low with the Guang­dong Re­search In­sti­tute of In­ter­na­tional Strate­gies, Guang­dong Uni­ver­sity of For­eign Stud­ies.

Tak­ing into ac­count the rel­a­tively small scale of Chi­nese for­eign di­rect in­vest­ment in the US, a sin­gle project may lift the amount in a sec­tor in a year, such as Shuanghui In­ter­na­tional Hold­ings’ $7.1 bil­lion ac­qui­si­tion of Smith­field Foods Inc in 2013.

With the growth in high net worth in­di­vid­u­als in China and the de­sire of some to in­crease their as­set val­ues, ho­tels and real es­tate have also re­ceived lots of at­ten­tion from po­ten­tial Chi­nese in­vestors, Wang said.

Op­por­tu­ni­ties lie in the bi­lat­eral in­vest­ment treaty be­ing ne­go­ti­ated by the two coun­tries, which, if suc­cess­ful, should fa­cil­i­tate in­vest­ment, as well as the Chi­nese na­tional plan Made in China 2025 un­veiled by the State Coun­cil re­cently, which pro­motes smart man­u­fac­tur­ing, she said.

Dur­ing the road show in China, mem­bers of the US del­e­ga­tion pre­sented the ad­van­tages of their re­spec­tive states, in­clud­ing the lo­ca­tion, trans­port net­work, gov­ern­ment in­cen­tives, low costs, trained la­bor, sound living en­vi­ron­ment and avail­abil­ity of in­sti­tu­tions of higher learn­ing.

Rep­re­sen­ta­tives of Florida pro­moted the state as the gate­way to Latin Amer­ica. Talks are tak­ing place to move some Chi­nese tex­tile, med­i­cal equip­ment and elec­tron­ics com­pa­nies into Florida to bet­ter reach both the Latin Amer­i­can and North Amer­i­can mar­kets, said Carol Fu, direc­tor of the Shang­hai of­fice of En­ter­prise Florida.

Guangzhou Sun­shine Hol­i­day In­ter­na­tional Travel Ser­vice Co is con­sid­er­ing es­tab­lish­ing an of­fice in the US to bet­ter ac­cess in­for­ma­tion on ex­hi­bi­tions in the coun­try, said Chen Heping, direc­tor of the ex­hi­bi­tion depart­ment of the com­pany.

Galt said: “The United States is com­mit­ted to broad­en­ing the USChina re­la­tion­ship and to build­ing a closer co­op­er­a­tive part­ner­ship through strong eco­nomic en­gage­ment at all lev­els.

“The re­cently an­nounced Guang­dong Free Trade Zone will no doubt cre­ate new op­por­tu­ni­ties for en­hanced US-China trade.” Ren Yue con­trib­uted to this story. Con­tact the writer at li­wen­fang@chi­


China’s Golden Dragon Cop­per Tube Group Inc

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