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Bridges and factories could woo American hearts (2)

By  Miao Yingchun (Global Times)

15:08, November 09, 2011

According to statistics from the US Bureau of Economic Analysis (BEA), Chinese companies employed 4,300 employees in the US in 2009. By 2010, Chinese companies had created 10,000 US jobs.

Although the salaries of executives and workers are higher for Chinese companies when making greenfield investments in the US, other costs, such as land, electricity and customs duties are much lower.

What is more important is that this kind of investment widens the international vision of Chinese companies and gives them experience in foreign investment.

So, China can increase direct investment in US through both the government and companies.

For the government, China can transfer its current assets, such as matured US debt, into investment in immoveable assets.

For instance, we can invest in Obama's plans for highways, bridges and airports, reducing the debt burden on the US government and at the same time gaining investment benefits.

Investment companies can increase equity investments in the US. Meanwhile private enterprises and listed companies can build their factories in the US to meet the country's appeals to develop local manufacturing. In fact, after 2008, manufacturing in the US has been the fastest growing type of foreign investment.

Chinese investments in US manufacturing have become an important way for the US to tackle the debt crisis, as the investments can help American entrepreneurs escape the crisis and create more jobs. The investments can also help Chinese companies expand their markets in the US.

The BEA's statistics show that direct investment only accounts for 0.25 percent of all investment in the US, which leaves a lot of room to grow. Chinese companies should seize the opportunity and increase direct investment in the US.

The author is an associate professor of the Institute for International Studies at Wuhan University. [email protected]

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