Japan led a wave of investment into America in the 1980s. Now it's China's turn.
A new report described as the first of its kind has broken down how much Chinese money is flowing into America, where it's going and its economic impact.
Chinese investors are already the biggest holders of U.S. government debt and are known for snapping up trophy assets like the Waldorf Astoria Hotel. The new analysis by the National Committee on U.S.-China Relations and Rhodium Group has found that Chinese companies and investors are putting money into everything from American copper plants and factories to real estate, across the country.
The biggest benefactors are districts in North Carolina, Illinois, New York, Virginia, and Texas.
Here are the numbers:
Between 2000 and 2014, Chinese firms spent almost $46 billion on acquisitions and new establishments across America, much of it in the past five years alone. By the end of last year there were 1,583 establishments by Chinese firms across the U.S., according to the report.
Still, Chinese FDI is only at the initial stage that Japanese firms reached in the 1980s and is tipped for further growth. The U.S. could receive between $100 billion and $200 billion of investment by 2020, creating between 200,000 and 400,000 jobs, the report found.
Chinese firms directly employ more than 80,000 workers across America, up from 15,000 five years previous and will likely quadruple that number over the next five years. Indirect employment is probably much greater and job creation through greenfield projects alone is nearing 10,000, the report estimates.
Headlines on Chinese and U.S. relations are usually dominated by tensions over trade and security as China flexes its economic muscle on the world stage. Corporate takeovers in the U.S. by foreign companies can be controversial as locals fear losing their jobs. But the report found that Chinese investment is saving jobs by offering new financing to troubled buisnesses.
One example: A $100 million copper plant located close to Thomasville, Alabama is said to have revived an area with one of the state's highest unemployment rates. Dragon Precise Copper Group employs more than 200 people with plans to hire 500 in total, the report said. And Fuyao Glass bought a shuttered General Motors plant outside Dayton, Ohio and pledged to create 1,500 jobs and invest hundreds of millions of dollars.
"Fears that Chinese acquirers could systematically move acquired assets and related jobs back to China have not materialized," the report said. "Instead, new Chinese owners have, in most cases, sustained and expanded local employment after they acquired U.S. assets."
Worries that Chinese companies will steal American intellectual property are also overdone, the report found.
"There is no evidence that Chinese investors are moving high value-added activities back to China. Instead, U.S. innovation clusters, strong protection of intellectual property rights, and the talent pool are major draws for Chinese companies, which now spend hundreds of millions of dollars every year on research and development activities in the U.S."
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