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    Rhodium Publishes Reports on US-China Foreign Direct Investment (FDI) Trends

    Rhodium Chinese FDI in US 2017 chart

    On April 10, 2018, Rhodium Group and the National Committee on U.S.-China Relations published two reports on US-China foreign direct investment trends. The report entitled “Two-Way Street: 2018 Update US-China Direct Investment Trends” reviews the bilateral FDI trends between the US and China, and discusses the anticipated outcomes of these trends, while “New Neighbors 2018 Update: Chinese FDI in the United States by Congressional District,” includes detailed information on the operations and investments of Chinese-affiliated companies in the United States based on region, state, and congressional district.

    Rhodium Group’s “Two-Way Street” report gives an overview of US-China FDI trends for 2017. See below for some highlights from the report:

    “Consummated 2017 FDI transactions between China and the US reached $43.4 billion. This represents a 28% drop from the $60 billion we recorded for 2016, but is still the second highest year on record.” [Pg. 10]

    “The reason for this drop was a decline in Chinese investment in the US to $29 billion in 2017 from $46 billion in 2016. This decline would have been much steeper without the $18 billion of Chinese acquisitions that were announced in 2016 but completed in 2017. American investment into China was almost unchanged over the previous year, at $14 billion (compared to $13.8 billion in 2016).” [Pg, 10]

    “Flows remained unbalanced with Chinese FDI in the US at twice the level of US investment in China ($29 billion vs. $14 billion.) In terms of stock, US companies still have significantly more historical investment in China ($256 billion) than their Chinese counterparts have in the US ($140 billion).” [Pg. 10]

    In the “Two-Way Street” report, Rhodium Group suggests that politics and new policies are to blame for the decline in Chinese FDI in the US.  As Beijing began to assert more control over their outbound investments, China’s outbound FDI flows declined for the first time in several years. In addition, Washington implemented a stricter screening process for foreign acquisitions, which also contributed to this decline. The report also discusses the specific industries that were most affected by these changing FDI flows. To read the full Two-Way Street report, visit the Rhodium Group website.

    Rhodium Group and the National Committee on US-China Relations also updated their “New Neighbors” report, which includes specific investment values, the number of operations, and employment affiliated with Chinese investors by region, state, and each of the 435 U.S. congressional districts. See below for some highlights from the report:

    “Tennessee has attracted more than $870 million of Chinese FDI since 2000. Today 70 Chinese establishments provide over 2,150 jobs across the state. The majority of these jobs are in manufacturing.” [Pg. 41]

    “Chinese FDI in the US dropped by more than one third last year (35%), the first major correction in a decade. In terms of newly announced transactions the decline was even sharper: the value of announced deals in 2017 fell more than 90% from 2016.” [Pg. 2]

    “Chinese companies added about 7,400 US employees to their payrolls in 2017-the lowest increase in five years. The total number of Americans directly employed by Chinese-owned companies in the US reached 139,000. This employment count only includes full-time direct jobs at US entities that are at least 50% owned by a Chinese parent company.” [Pg. 6]

    To download the full New Neighbors report, visit the Rhodium Group Website.


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