Thursday, May 5, 2011

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.

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