Chinese investment in US could double in 2016
Investors from China poured a record $15 billion into the US economy last year and it could reach $30 billion this year, mainly through mergers and acquisitions. The data was compiled by Rhodium Group researchers and the National Committee on US-China Relations.
"Today's Chinese investment in the United States gives us a fresh opportunity to learn about one another, and it is already having profound effects on the lives of Americans," said Stephen A. Orlins, President of the National Committee on US-China Relations.
By the end of 2015 more than 1,900 Chinese-affiliated companies were operating in the US across more than 80 percent of its congressional districts and employing some 90,000 people, said the report.
The study showed that only an eighth of China’s $120 billion in outward investment last year went to the US. Nevertheless, the amount invested in American businesses is growing rapidly as Beijing wants to shift the economy toward technology, services and greater consumer spending.
More than $5 billion in US deals have been completed in the first three months of this year alone.
“They’re scrambling to upgrade their technology, they’re scrambling to build household brands quickly,” said Thilo Hanemann, economist at the Rhodium Group. “We’re seeing a big shift in Chinese investment from the developing world and emerging markets to high-income markets including the US, Europe and Australia.”
Hanemann said the geographic diversification is being driven by a variety of new investments.
“Chinese investors are interested in a broader mix of industries, which is expanding their footprint from coastal urban economies to rural areas," he said.
The study found that last year New York saw the most Chinese investment at $4.1 billion topping California's $1.8 billion. New York has benefited from deals related to tourism and financial services.
Over the past 15 years, Chinese firms invested $70 million in Californian food and agriculture companies while total investment in the sector across the US reached $7.4 billion.
Hanemann said California will be a top destination in coming years for a variety of Chinese investment in the US, which could reach $200 billion by 2020.