Changing Tides: Americans Search For Chinese Investment Money
When I first visited China in the mid-1980s, the country was just starting to lift its relatively small and poor economy from the Mao era and set out on its historic reforms. The U.S., though facing challenges from Japan and Germany, was overall a healthy global economic leader.
How things have changed. The U.S., currently the world’s largest debtor, is facing profound economic, political and social problems. China, meanwhile, has gone on to become the world’s No.2 economy with one of the world’s best GDP growth rates and largest savings pools.
Two gatherings in Shanghai in the past few days underscore how the changing fortunes of the two countries are affecting U.S.-China economic ties. On Friday, some 150 people attended a conference sponsored by the American Chamber of Commerce in Shanghai to promote “Chinese Investment to the United States.” The event, held in Shanghai’s glitzy Lujiazui financial district, was supported in part by Nimbus Strategies of Chicago. Speakers came from Citicorp, JP Morgan and other U.S. companies.
In a different gathering at another five-star hotel a few blocks away a day later, the Windham Realty Group of Florida attracted dozens of well-off potential buyers to a dinner to pitch residences currently for sale at CityCenter in Las Vegas, a development project backed by MGM Resorts MGM -4.06% and Dubai World. The gambling mecca, still recovering from a property bust, would surely benefit from fresh Chinese cash and visitors.
These two Shanghai events followed news last week of a well-received Chinese investment in Europe. Dalian Wanda Group, which last year bought U.S. movie chain AMC, said it would invest a total of $1.6 billion in real estate and a yacht manufacturer in the UK. Last month, in an announcement that has generated controversy, China’s Shuanghui said it would buy U.S. meat processor Smithfield for $4.7 billion, obtaining well-known brands including Smithfield and Armour.
To be sure, China today has its many of its own problems. And Americans need to be wary of Chinese government subsidies that constitute unfair trade, as well as any investments that could threaten U.S. national security and violate laws, including those covering food and product safety. Yet that leaves plenty of room for other investments from a well-off China that, as Foster noted, would benefit the U.S. economy and jobs.
In all likelihood, it’s still very early days for Chinese investment in the U.S. Americans worried about the outlook for prosperity and jobs should keep an open mind to the economic benefits Chinese capital may bring. Our piranha class of self-interested politicians, lobbyists and bureaucrats in Washington have dug the U.S. economy into too deep of a hole not to do otherwise.