By E. Scott Reckard andJulie Makinen
Rising energy and labor costs in China have helped to push the trend toward direct U.S. investments by Chinese individuals and companies over the last five years, said the study by global research firm Rhodium Group and the nonprofit National Committee on U.S.-China Relations.
Chinese investors have bought or created 1,583 U.S. companies over 15 years through December that now employ 80,600 full-time workers after a five-fold increase in the last five years.
FOR THE RECORD:
Chinese investments: In the May 20 Business section, an article about Chinese investment in U.S. businesses referred in one instance to the total potentially reaching $200 million by the end of 2020. As the article correctly said in another reference, total investment could reach $200 billion, not million. The article also misidentified a U.S. subsidiary of Alibaba Group Holding as 11 Main Street. It is 11 Main Inc.
California was the top destination as Chinese investors put $5.9 billion into almost 370 businesses that provide about 8,300 jobs, mostly in the Los Angeles and San Francisco metropolitan areas.
The fast-rising investment pales in comparison to three decades of far greater flows of U.S. capital into Chinese manufacturing, and China’s direct investments in U.S. companies still are far from those made by a host of other countries.
Still, Chinese purchases and start-ups should deepen ties in ways that mere purchases of foreign products cannot do, said Stephen A. Orlins, the National Committee’s president.
“Investment brings people together. Trade, less so,” he said.
That’s an easier argument to make to a mayor in Alabama or a governor in California than to many politicians in Washington, said Thilo Hanemann, Rhodium’s director of research.
On Wednesday, Mayor Sheldon Day of Thomasville, Ala., is scheduled to describe at a New York news conference on the study how Golden Dragon Precise Copper Tube Group helped revive his depressed region of muddy roads, pine forests and shuttered textile and furniture factories. The company, based in China’s Henan Province, built a $100-million manufacturing facility that employs 300 workers.
Elsewhere, Chinese investors have been largely welcomed at new and existing firms.
In West Los Angeles, more than 1,000 employees, called rioters, labor at online video-game producer Riot Games, the maker of the popular “League of Legends” game. Chinese Internet company Tencent Holdings Ltd. bought a majority stake in the firm in 2011 for $250 million.
Posted on May 21, 2015 at 10:51 am by Ralph Schiavone