Beijing: As China moves to invest billions in businesses around the world, one major industrial nation has so far soaked up very little of the cash: the United States. The issue will be on the agenda this week during Vice-President Xi Jinping's official visit to the United States.
The Obama administration has made seeking Chinese investment a priority, with an eye toward creating more American jobs. But the flow of funds dropped sharply last year, and experts say the task is complicated by a perception that the United States is an unfriendly place for Chinese investors.
With Ambassador Gary Locke taking the lead in the effort, American officials are trying to overcome a sense here that the United States is hostile to Chinese investment, that national security concerns pose insurmountable obstacles, and that members of Congress, local politicians and sometimes even the media will vocally oppose attempts by "Red China" to acquire, or put money into, struggling or start-up American firms.
Overall growth
"We want to make it clear that the US welcomes investment from China," said Christopher Quinlivan, commercial counsellor at the US Embassy in Beijing.
While China's investment in the United States has shown overall growth over the past five years, it still represents less than 1 per cent of all foreign investment in the United States, said Thilo Hanemann, research director at the Rhodium Group, a New York-based economic research firm that tracks the inflow.
Chinese companies — primarily state-owned enterprises — seriously began investing overseas only in the middle of the past decade and kept the vast majority of their funds in Asia and places with mineral resources, such as Australia.
New figures supplied by China's Commerce Ministry put investment in the United States in 2011 at $1.13 billion (Dh4.14 billion), far less than the $4.6 billion in Europe.
The US figure also represents a 19 per cent drop from the previous year, although overall investment has increased more than fivefold from 2007, when it stood at just $195 million, according to Chinese government statistics.
Smaller stakes
Among about 260 US projects that have attracted Chinese capital, the largest share in dollar terms has come from Chinese state-owned enterprises investing in things such as steel and shale natural gas, according to the Rhodium Group. Most of the investments have been smaller stakes taken by Chinese private businesses, often in the renewable or clean-energy sector.
The US government does not provide nationwide figures on Chinese investment. Over all, some experts now expect that China will send as much as $2 trillion in investments overseas between now and 2020 as the country tries to shift its economy away from a reliance on exports.
Until recently, the task of promoting the United States to Chinese investors was left to state and local officials, but the Obama administration has launched a new initiative, called "Select USA," to drum up investors' interest.
Locke, a former commerce secretary, has been talking up the United States as an investment destination since he arrived here last summer, but it's proving a hard sell. Chinese business owners who want to invest in the United States say they often have a difficult time obtaining a US visa to be able to travel and see projects.
Concerns
Cui Tiankai, a Chinese vice-foreign minister in charge of US affairs, said a major goal of Xi's upcoming trip would be to address such concerns.
"We want to see obstacles standing in the way of our business ties to be removed," Cui said on Thursday at a briefing for foreign reporters here, mentioning "the removal of US export controls on high-technology exports to China and the removal of barriers to Chinese companies."
