Chinese FDI in the United States according to data of 2015 is the highest in history, standing at $15.7 billion, a figure that represents 30% rise from 2014 (Rhg.com). The stock of China in the USA according to the latest data stands at $45 billion. China ranks third in FDI outflow in the world behind the United States and Japan.
The FDI flow from China to the USA is bigger than that of the USA to China. Recently, the tide of FDI flow has changed from the USA to China, and it is now China to the USA. Individual Chinese firms are heavily investing in the USA hence the rise in FDI flow to America (Peng 284).
The negative perspective towards Chinese potential to become an economic giant in the world and probably surpass the United States and other European nations have been rife for a long time. Stories if “the sleeping giant awakening”, referring to China fulfilling its economic potential due to the large pool of labour have been there for a long time (Rhg.com). Many reports are capitalising on the fears of the population of being overtaken by the Chinese to sell their content to the Americans.
One of the biggest FDI project undertaken by Chinese multinationals in the USA is the $5.4 billion acquisition of General Electric’s appliance unit in 2015. One of the advantages of having Haier Investors pump the large sum of money into the American economy will have the impact of development and strengthening the research and hence positive growth of the company. A positive growth of GE means that Americans will get better products and services (Rhg.com). Control of big companies such as GE by a foreign company means that a given portion of taxes that initially was paid to the American government will be paid to a foreign government. Clearly, it is positive for the foreigners to move in and invest in the economic development of the United States (Peng 266). Strengthening of American companies is good news for the American.
Works Cited
Peng, Mike W. Global Business. [S.l.]: Cengage Learning, 2016. Print.
Rhg.com,. "Rhodium Group » Chinese FDI in the US: 2015 Recap". N.p., 2016. Web. 13 Feb. 2016.
