China's surging investment in US heralds new multinational era
Sino-US multinationals may emerge as Chinese investors now putting more money into America
Chinese investments in the United States now exceed American investments in China in an historic shift that may see the emergence of joint Sino-US multinationals, but one that is also fraught with geopolitical risks, said analysts.
"Chinese FDI [foreign direct investment] into the US will be one of the great economic stories of the next decade," said Mike Margolis, a partner at US law firm Blank Rome.
As China continues to increase its investment in the US there might emerge a new generation of global companies jointly owned by Chinese and American investors that will dominate sectors such as energy, manufacturing and services, said Mao Tong, a partner at US law firm Squire Sanders.
However, this trend will take some time to materialise and is dependent on investment and trade restrictions being lifted, he added.
For decades since the mainland's economic liberalisation in the 1980s, investment between the two countries was dominated by American investment in China for its cheap costs and fast growing market. That trend has reversed, according to data compiled by the Rhodium Group, a US consultancy.
Chinese investment in the US soared from an annual average of less than US$1 billion before 2008 to over US$14 billion last year, a report from Rhodium said.