The American Enterprise Institute and Heritage Foundation’s China Global Investment Tracker follows large Chinese investments, excluding bonds, around the world. The leading recipient of these kinds of investments is the United States, at just over $70 billion from January 2005 through June 2014.
The deals described in the tracker are worth $100 million or more and are voluntary transactions. They let ordinary people make their own economic choices. Chinese purchases benefit Americans who hold desirable assets, including individual family homes, not just office towers or giant corporations. Chinese investment helps support a small number of American jobs.
China is not an enemy, but it is not a friend. Government involvement in Chinese investment in the US should be limited but some guidelines are necessary. Chinese firms and individuals should not be allowed to buy advanced technology that could have military uses. American policymakers should be aware that most Chinese firms have little familiarity with a competitive market under the rule of law, so their ability and willingness to obey American law should be monitored. If these guidelines are kept in place, Chinese investment in the US can continue to be a net positive for both countries.
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So a Chinese firm is buying the Waldorf Astoria in Manhattan. This is being taken by some as another sign of China's wealth, prominence on the global stage, rise at the expense of the US, and so on. It may be closer to the opposite: a sign that opportunities within China have already faded.
Accusations come almost daily. China is waging a mercantilist campaign against multinationals, from German auto titans to American technology firms to Japanese ball-bearing makers, for supposed monopoly abuses and other legal infractions. There is more going on, however, than the attack on foreign companies.
Washington and Beijing are ostensibly having serious discussions of a bilateral investment treaty to improve transparency and other aspects of the trans-Pacific investment environment. One hopes it's not really true, that the American side is just humoring the Chinese, because it's impossible at present to see such an agreement benefiting the US.
The AEI-Heritage Foundation China Global Investment Tracker follows Chinese investment all over the world. Through June 30 2014, the U.S. had received over $70 billion in Chinese investment. This is the most of any country, and much more could be on the way, likely breaching $100 billion in total by 2017 and continuing to rise (unsteadily) from there.
China's attack on foreign companies is a serious matter. It started soon after Xi Jinping took his government office as president in March 2013 and has continued almost unceasingly since, with inquiries into Microsoft, Daimler, and others disclosed last week.
Front page news concerning Chinese economic weakness and accusations of large-scale cyber-espionage against the U.S. both involve the capacity to innovate. Cyber-stealing other people's knowledge, rather than developing it yourself, helps right away but discourages the innovation at home that can contribute to national wealth for the long term.
The Justice Department announced charges against five members of the Chinese military for cyber espionage conducted against US companies and a labor union. This constitutes an escalation of the American response to large-scale, government-sponsored theft of technology and trade secrets by China. However, it is a small step toward meaningful public action by the US, not a big one.
AEI's Derek Scissors participates in a debate over the United Nations International Comparison Program data on China's economy unseating the United States by the end of 2014. Does it matter?