The two largest economies in the world, China and the United States, consider themselves both potential adversaries as well as strategic partners. This situation evolves as a result of the history between the two countries which have experienced relative stability with some instances of open conflict as in events such as the Vietnam War and the Korean War. In terms of trade, the two countries have registered tremendous gains with the United States and China taking the first and second places respectively (Bergsten, Hufbauer, and Miner 22).
In spite of the U.S being the world’s leader in FDI, it has minimum investment in China. According to Bergsten et al. (27), from the $19 trillion invested in other countries by the U.S, only 10% is in China. This situation has been attributed to weak property laws including Intellectual Property laws that limit American companies from investing in China. In addition, the restrictions placed by the Chinese government in a majority of its sectors are also barriers faced by American firms hence explains the minimum trade between the two countries.
However, other countries have found China to be a formidable investment location as a result of its growing economy. Regardless of the state of the global economy, investments in China have continued to grow. According to Bergsten et al. (44), China has surpassed the United States as the biggest recipient of FDI in the world, estimated at $128 million. In this regard, other Western countries such as the United Kingdom have invested significantly in the country. The U.K has projected to quadruple its investment in China by the year 2020, at an approximate cost of £26 billion.
The varied investment reactions in China signify the country’s potential as a crucial trading partner as well as unearthed various considerations China may take into consideration to improve its position in the global market with respect to the United States and the rest of the world.
Work Cited
Bergsten, Fred, Gary, Hufbauer, and Sean Miner. Bridging the Pacific: Toward Free Trade and Investment between China and the United States. , 2014. Print.
