Why China’s biggest engineering firms in America are expanding into real estate
Companies biding time as they face hurdles in US infrastructure market
Stiff competition among companies bidding for infrastructure projects in the US has pushed China’s biggest engineering and construction companies operating in the country into real estate and other forms of investment.
Difficulties in qualifying for large public-private partnerships, also known as P3s, limit the degree to which China can participate in many billions of US dollars worth of infrastructure spending, said executives of China Construction America, Inc., owned by China State Construction Engineering Corp., and China Communications Construction (USA), Inc., a subsidiary of Hong Kong-listed China Communications Construction Co. Ltd.
“We have prepared US$1 billion of equity for US P3 projects since 2006 … but I cannot find an opportunity to spend that,” said China Construction America President Ning Yuan. “In the meantime, we’ve been increasingly investing in real estate developments and other projects that generate revenue.”
Infrastructure spending by Chinese companies in the US may form a key component of stronger economic ties between the world’s two largest economies, observers say.
US President Donald Trump and his Chinese counterpart Xi Jinping last week kicked off efforts to address obstacles to more balanced trade and investment between the two sides when they met for a two-day summit in Florida.