Investment in US hits record level for Chinese (2)

The United Nations Conference on Trade and Development said in October that China edged out the US to become the world's top FDI destination in the first half of 2012, but added the US may return to the top spot during the second half of the year.

While FDI in the US from Europe and Canada declined by more 50 percent in the first three quarters of 2012, China was among the few countries that has now increased investment in the US for five years running, according to figures from the US Bureau of Economic Analysis — a figure representing a rise of more than 300 percent in that time.

Hanemann believes the bureau's figures are lower than they should be because they do not include flows through offshore financial centers, and Rhodium's China Investment Monitor suggests the increase would be nearer to 1,300 percent if those were included over the five years.

Chinese majority-owned businesses in the US now employ 29,000 people, up from fewer than 10,000 five years ago, and that figure could run into many more thousands if jobs created by firms with minority Chinese investment, and other indirect jobs created by Chinese FDI, were taken into account.

Former US Trade Representative Carla Hills said that she believes Chinese investment in the US is good for both countries.

"China's entrepreneurs benefit from the world's largest consumer market, creative and diverse workforce, management skills, strong global brands, and the attractive business and investment climate found in the US.

"The US benefits from an increase in much-needed tax revenues and jobs generated by Chinese investment," she said.

"As important as these economic benefits are in advancing prosperity in both countries, the most important benefit flowing from increased economic interactions may well be the increase in mutual understanding that will surely occur.

"That helps provide the ballast for overall Sino-US relations," added Hills, who is also chairwoman of the National Committee on US-China Relations.

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