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Bridges and factories could woo American hearts

By  Miao Yingchun (Global Times)

15:08, November 09, 2011

Chinese companies have often faced barriers to investment in the US. US President Barack Obama has recently announced plans to improve US infrastructure, including renovating roads and bridges, in order to create jobs. I think this offers an opportunity for Chinese firms to become more popular in the US.

In a country with high unemployment, investments that can create jobs for local residents are certainly welcomed. However, Chinese companies only have a few such greenfield investments in the US at present. They prefer mergers and acquisitions, which are often obstructed by the US government.

According to a report released by the Rhodium Group, an American consulting agency, out of $3.27 billion of direct Chinese investment in the US in the first half of this year, $573 million was used for 20 new constructions, while the other $2.7 billion was used for 11 mergers and acquisitions.

Greenfield Chinese investments span several different industries, such as communications, renewable energy, space flight, and pharmaceuticals.

Americans think that greenfield investments can expand the economy and create more jobs. They do not involve technology transfer, and they do not need the examination and approval of the Foreign Investment Review Board. As a result, greenfield investments are more popular than mergers and acquisitions in the US.

Many Chinese companies have succeeded in greenfield investments in the US. For example, in September 2007, Sany Heavy Industry invested $30 million to build its North American headquarters in Peachtree, Georgia.

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