China's Outbound Foreign Direct Investment: The U.S. Experience
International Journal of Public Policy, Special Issue on the Regulatory Response to China's State-Owned Enterprise Investment Abroad, 2017, Forthcoming
19 Pages Posted: 17 Aug 2014 Last revised: 15 Dec 2019
Date Written: March 4, 2015
US policy expressly welcomes Chinese investment, and since 2000 Chinese companies have invested nearly $50 billion in the United States. Notwithstanding those facts, the US regulatory environment for Chinese investment - at least with respect to the national security reviews of certain proposed transactions - has been criticized as politicized and protectionist.
This article analyzes the experience of Chinese investors in the United States, particularly with respect to national security reviews led by the Committee on Foreign Investment in the United States (CFIUS). This article addresses a small, but significant, group of controversial US transactions involving Chinese acquirers, including CNOOC, Tangshan, Northwest, Huawei, and Ralls, which have had a damaging impact on Chinese perceptions of the US investment environment, and identifies key trends with respect to the US regulatory environment for foreign investment generally.
The need for some $8 trillion in investment over the next 15 years to modernise US infrastructure should provide many opportunities for the US Government to further demonstrate that foreign investment - and in particular, Chinese investment - is indeed welcome in the United States.
Keywords: China, FDI, CFIUS, Exon-Florio, Ralls, CNOOC, Huawei
JEL Classification: K33
Suggested Citation: Suggested Citation