China invests billions in US.
A new study, which looked at Chinese investment by congressional district, found the money was scattered across every region. Chinese companies are buying trophy properties in New York. They are building manufacturing operations in the Midwest. And they are snapping up Internet companies in California.
In all, Chinese companies have invested $46 billion in the United States since 2000, with most coming in the last five years, according to a study prepared by the Rhodium Group, a New York research firm, to be released on Wednesday
At the same time, geopolitical tensions with China have been rising. Washington is worried about China’s construction of artificial islands and at least one military-grade airstrip on disputed shoals, as well as the country’s deployment of multiple, independently targeted hydrogen bomb warheads. The Obama administration has also raised concerns about the new Chinese-led development bank.
The steadily rising corporate investment could quell some of the criticism of China in Congress, said Stephen A. Orlins, the president of the National Committee on U.S.-China Relations, a nonprofit group that sponsored the Rhodium study and promotes cooperation between the two countries, and is releasing the report with Rhodium. “If you’ve got 3,000 to 4,000 of your people working for the Chinese, that’s feeding a lot of your constituents,” Mr. Orlins said.
That said, Chinese investment alone won’t quiet the criticism. “The geo-security tension will get worse, so the economic upside better be strong to offset the negativity,” said Daniel Rosen, the Rhodium Group partner who oversees the company’s work on China.
China’s approach to American investment contrasts with Japan in the 1980s, when it was the world’s rising export powerhouse.
Back then, the Japanese government encouraged the country’s automakers and other very large manufacturers to open factories in crucial congressional districts as a way to blunt pressures for legislation limiting imports to slow heavy American job losses. That policy appeared to bear fruit in the next decade as lawmakers from districts with big Japanese factories, particularly those in Southern states with little union presence, were reluctant to support restrictive trade measures.
It’s not easy, though, for Beijing to follow Japan’s example. That is because Chinese companies of all sizes and types are now investing. While some are state-owned enterprises that may closely follow the dictates of government policy makers, many are medium-size businesses owned by entrepreneurs who often put profits first.
Representative Matt Salmon, Republican of Arizona and the chairman of the House Foreign Affairs Committee’s panel on Asia and the Pacific, said that the American operations of Chinese financial services companies and exporters had contacted him periodically to ask that American markets be kept open to China’s exports. “Access to U.S. markets, that’s what they want,” he said.
The study, the first detailed analysis of Chinese investments by congressional district, shows little correlation with the districts of key lawmakers. Not one of the five House Republican leaders represents a district that ranks in the top 15 by Chinese investment, measured in dollars since 2000 or by the number of employees of Chinese companies.
And only one of the top four Democrats in the House does: Representative Nancy Pelosi of California, the former speaker and current House minority leader. She represents a district in San Francisco where a third of the residents are Asian-Americans, and where many entrepreneurs have formed trans-Pacific business ties.
He Weiwen, a former Commerce Ministry official who is now known as a trade policy intellectual, said that the study’s results were surprising and showed that the Chinese government needed to try harder to guide companies’ investments into central congressional districts. Mr. He, who is now the co-director of the influential China-U.S.-E.U. Study Center, said the study would be carefully considered in Beijing.