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January 19, 2011

China's Investments in US Are Growing

China's investment in U.S. business operations is growing rapidly, as the world's second largest economy seeks to find opportunities for profits on the home turf of the biggest global economy.

Accounts vary on the extent of the Chinese investments in the United States, but the total may have been $5 billion to more than $6 billion last year. That is likely more than double the 2009 figure. As recently as 2005, there were no individual deals worth more than $100 million, and now numerous investments are bigger.

This week, as Chinese President Hu Jintao visited the U.S. for a summit with U.S. President Barack Obama, more deals were announced. The Chinese agreed to buy $45 billion worth of U.S. exports, as well as invest more than $3 billion in the U.S. operations of Chinese firms.

Most of the Chinese investments in U.S. operations are at manufacturing plants, such as for solar panels or automotive parts. But the Chinese also have invested in a martial arts theater and a sporting goods company in the U.S.


Friday Mr. Hu was in Chicago, the third biggest U.S. city. He is meeting there with U.S. and Chinese business leaders and expected to sign a variety of agreements that involve Chinese companies opening or expanding their U.S. operations, as well as American companies seeking new business in China.

Trade between China and the U.S. totaled more than $400 billion last year. But that figure is dwarfed by the amount of U.S. debt held by the Chinese – more than $895 billion at the end of last November. China holds the most U.S. government securities, topping the $877 billion held by Japan.