China Foreign Direct Investment in U.S. Is Small But on the Rise

This is an analysis of Chinese Foreign Direct Investment (FDI), not so much residential real estate. But I thought the numbers illuminating.

China’s investment wave heads to U.S. shores

“China’s current outward FDI stock of $230 billion still accounts for a mere 1.2% of the global FDI stock, on a par with Denmark and only slightly above that of Taiwan,” the report said. “Japan, for instance, has a stock three times that of China, while the United States has $4 trillion, or 20 times, the OFDI assets of China.”

Included in that worldwide wave of Chinese investment was $2.3 billion worth of direct spending in the United States at the end of 2009, the report said, citing the U.S. Bureau of Economic Analysis — a minor amount compared with total FDI stock in the United States in 2009 of $2.3 trillion.

Nevertheless, the authors noted, “the average annual compound growth rate of China’s outward FDI in 2004-2008 exceeded 130%.” Why? The report cited a shifting business climate in China as one reason for the go-abroad trend.