Demystifying Chinese Investment in the United States

By Henry M. Paulson, Jr. (original source Paulson Institute) 

“For almost 40 years, the US-China economic relationship has been defined by rapidly growing bilateral trade, and it is only recently that Chinese foreign direct investment (FDI) in the United States has begun to make a strong mark. These investments are likely to grow significantly, establishing another important and often beneficial economic linkage that, at its best, will support and even create American jobs. Moreover, by linking the two economies more directly, investment can also serve as ballast for what is becoming an increasingly important but more difficult and fraught relationship between the two countries.

Although bilateral trade and the success of US businesses in China have conferred substantial economic benefits onto both nations and are an important linchpin of the relationship, this economic interdependence is not without controversy and real points of friction. This is due to regular trade spats and, especially in recent years, to Chinese government policies that have restricted market access and made it harder for some US firms to compete in China. But it also reflects a lack of public understanding of the enormous economic benefits that trade in general, including trade with China, provides to Americans.”

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