Chinese Investors Are Putting More Money In America
Patricia Villaceran | | Aug 05, 2014 02:36 PM EDT |
(Photo : REUTERS/PETAR KUJUNDZIC)
There is a surge of Chinese investors emerging in the United States market.
Recent reports revealed that Chinese investments already outweigh American investments in the stock-market and it could mark the start of a joint Sino-U.S. market.
However, analysts said that it could pose some geopolitical risks.
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Mike Margolis, a partner at U.S. law firm Blank Rome, said Chinese foreign direct investment could be considered a historic event in finance and a "great economic story of the next decade."
According to the data compiled by Rhodium group, Chinese investment in the U.S. started increasing in 2013 with an average of US$1 billion in 2008 to over US$14 billion last year.
The total FDI of Chinese from 2007 to 2012 soared from US$1.9 billion to US$17.1 billion, according to the Chinese Ministry of Commerce figures.
As Chinese investors continue to invest in U.S., it is possible that a new set of global partnerships owned by Americans and Chinese might emerge.
It is reported that investors could focus on sectors such as energy, services and manufacturing, according to Mao Tong from Squire Sanders.
"On the U.S. side, China has begun to be perceived as not only a top exporter but an important investor with cash and job creation potential," said Mao.
Mao also added that local governments in the U.S. plan to visit China to entice more investments.
"There is only one economic game-changer on the horizon for Los Angeles: Chinese investment. Political and business leaders in Los Angeles recognise this and are bending over backwards to make Los Angeles more attractive to Chinese investors," said Margolis, who currently resides in Los Angeles.
However, the Sino-U.S. financial market could take time to materialize since it still has to depend on the investment restrictions made by each nation.
But if both nations could agree on the Bilateral Investment Treaty, the Chinese investment could reach over US$100 billion by 2020. The figure greatly exceeds the level of U.S. investments in China, according to He Weiwen from China-US/EU Study Centre.
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