An Analysis of the Obstacles Faced by Chinese FDI in the U.S.
Author
Xu, Yang
Term
4. term
Publication year
2014
Abstract
Chinese investment in the United States has grown rapidly since the global financial crisis, even though China is a relatively new investor in this market. This thesis examines why these investments often draw extra attention. Foreign direct investment (FDI) is when companies buy or set up businesses abroad. In the United States, the Committee on Foreign Investment in the United States (CFIUS) reviews certain deals to protect national security. Because ties between the Chinese state/Communist Party and Chinese firms can be opaque, China-related transactions are more likely to be scrutinized. Since 2005, public debate about Chinese FDI has been intense and remains unresolved. The financial crisis weakened confidence in the U.S. and deepened distrust of China. Concerns focus on national security, economic security, and reciprocity (mutual market access). Although mainstream U.S. policies are generally open to Chinese investment, several high-profile cases have led many in China to feel unwelcome. The thesis identifies four reasons why Chinese firms face obstacles in the U.S.: (1) China is viewed by many as a strategic rival, and some fear economic engagement will strengthen China’s national power; (2) there is unease about Chinese state capitalism and a China model that may distort markets and disadvantage U.S. companies; (3) distrust has grown, especially within the security community, where Chinese investors are sometimes approached with a presumption of risk; and (4) decisions about Chinese FDI are influenced by broader U.S.–China economic and political relations, with members of Congress considering both the bilateral context and the interests of their constituencies. The thesis concludes that, given deep differences between the two countries and the competitive nature of the relationship, the U.S. finds it difficult to assess and trust Chinese FDI, so obstacles and an unfavorable public climate are likely to persist for the foreseeable future. It also argues that China shares responsibility: the boundary between state and market is ambiguous, law enforcement is weak, and many Chinese actors do not fully acknowledge these issues, do not sufficiently understand U.S. politics and rules, may over-interpret U.S. actions as strategy, and do not adequately assess the U.S. investment environment. Even so, the existence of obstacles does not change the broader reality that the U.S. generally welcomes Chinese investors; Chinese FDI has both benefits and drawbacks, and the overall climate is not hostile.
Kinesiske investeringer i USA er vokset hurtigt siden den globale finanskrise, selv om Kina er en relativt ny investor på dette marked. Denne afhandling undersøger, hvorfor disse investeringer ofte får ekstra opmærksomhed. Udenlandske direkte investeringer (FDI) er, når virksomheder køber eller etablerer virksomheder i udlandet. I USA gennemgår Committee on Foreign Investment in the United States (CFIUS) visse handler for at beskytte national sikkerhed. Fordi forbindelserne mellem den kinesiske stat/Kommunistpartiet og kinesiske virksomheder kan være uigennemsigtige, bliver Kina-relaterede transaktioner oftere gransket. Siden 2005 har den offentlige debat om kinesisk FDI været intens og uden klar konklusion. Finanskrisen svækkede tilliden i USA og øgede mistilliden til Kina. Bekymringerne handler især om national sikkerhed, økonomisk sikkerhed og gensidighed (adgang til hinandens markeder). Selv om amerikanske hovedstrømsholdninger og politik generelt er åbne for kinesiske investeringer, har flere opsigtsvækkende sager fået mange i Kina til at føle sig uvelkomne. Afhandlingen peger på fire grunde til, at kinesiske virksomheder møder forhindringer i USA: (1) mange opfatter Kina som en strategisk rival og frygter, at økonomisk samkvem styrker Kinas nationale magt; (2) der er ubehag ved kinesisk statskapitalisme og en Kina-model, der kan forvride markeder og stille amerikanske virksomheder dårligere; (3) mistilliden er vokset, især i sikkerhedskredse, hvor kinesiske investorer ofte mødes med en forudgående mistanke; og (4) vurderinger af kinesisk FDI påvirkes af de bredere amerikansk-kinesiske økonomiske og politiske relationer, hvor Kongressen både ser sager i lyset af det bilaterale forhold og reagerer på vælgernes lokale interesser. Afhandlingen konkluderer, at forskellene mellem landene og forholdets konkurrencemæssige karakter gør det svært for USA at vurdere og have tillid til kinesisk FDI, så barrierer og et ugunstigt offentligt klima sandsynligvis vil bestå i en overskuelig fremtid. Den argumenterer også for, at Kina deler ansvaret: grænsen mellem stat og marked er uklar, retshåndhævelse er svag, og mange kinesiske aktører erkender ikke fuldt ud problemerne, forstår ikke amerikansk politik og spilleregler tilstrækkeligt, kan overfortolke amerikanske handlinger som strategi og vurderer ikke USA's investeringsmiljø tilstrækkeligt. Alligevel ændrer forhindringerne ikke ved, at USA overordnet set stadig byder kinesiske investorer velkommen; kinesisk FDI har både fordele og ulemper, og klimaet er ikke grundlæggende fjendtligt.
[This apstract has been rewritten with the help of AI based on the project's original abstract]
Keywords