Photographer: Luke Sharrett/Bloomberg

Chinese Investment Creates and Protects U.S. Jobs, Rhodium Says

  • Analysis shows spending across country aids Trump policy goals
  • Investments in U.S. tripled to a record $46 billion last year

Employment by Chinese-owned firms in the U.S. has jumped ninefold since 2009 to 140,000 jobs while China’s investment in the country tripled to a record last year.

That’s according to a Rhodium Group analysis released Tuesday jointly with the National Committee on U.S.-China Relations. Chinese investment flowed for the first time into 63 congressional districts last year to expand its presence to all but 10 of 435, the report said.

China’s foreign-direct investment helps fuel U.S. economic growth and employment, Rhodium and the committee said in the report, adding that it’s also in line with achieving the policy goals of President Donald Trump’s administration. The report follows Trump’s hosting President Xi Jinping this month and plans for a reciprocal visit to China later this year.

“The data overwhelmingly suggests Chinese investment in the United States is complementary to the current administration’s focus on creating and protecting American jobs,” committee President Stephen Orlins wrote in the report. “There is ample room for additional growth, if leaders on both sides can navigate the regulatory hurdles and political barriers that naturally arise in dealings between the world’s two largest markets.”

Trump’s Threats

Trump has largely avoided making good on his campaign threats to punish China for unfair trade, most recently declining to label it a currency manipulator earlier this month. Xi wants to revive talks for a Bilateral Investment Treaty and other priorities such as cooperation in infrastructure construction and energy, according to the official Xinhua News Agency.

Chinese FDI in the U.S. grew at an average annual pace of 32 percent from 2010 to 2015, then soared 200 percent last year to $46 billion, triple the prior year’s $15 billion record, Rhodium estimated. Mergers and acquisitions accounted for 96 percent of that investment.

Among the biggest deals were conglomerate HNA Group Co. buying networking and software distributor Ingram Micro Inc. for $6 billion and Haier Electronics Group Co. $5.4 billion purchase of General Electric Co.’s appliance business. Other major deals included the Anbang Insurance Group Co. acquisition of Strategic Hotels & Resorts Inc. and Apex Technology Co.’s $3.6 billion deal for computer-printer maker Lexmark International Inc.

Chinese companies made 178 individual investments last year that added 1,300 new operations, Rhodium said. That increased the total Chinese-owned businesses to 3,200 last year from 1,900 in 2015. The tally includes several operations belonging to Irvine, California-based Ingram, which has major facilities in six states.

“Coastal economies remained major beneficiaries, but Chinese presence in the South and Midwest grew significantly,” researchers wrote in the report.

New York City Representative Carolyn Maloney’s 12th congressional district was the top recipient of Chinese FDI from 2000 to 2016, with $8.66 billion. Rounding out the top recipients districts were Chicago; Raleigh, North Carolina; and Louisville, Kentucky. House Minority Leader Nancy Pelosi’s San Francisco district was ranked fifth with $3.16 billion.

Rhodium and the U.S.-China committee last year estimated in a separate report that FDI flowing both ways between the U.S. and China may be two to four times greater than shown by data from both governments. Nearly 6,700 U.S. investments in China over a quarter century had a combined value of $228 billion, Rhodium found, far beyond the $75 billion U.S. Department of Commerce estimate or the $70 billion from China’s Ministry of Commerce.

— With assistance by Jeff Kearns

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