Reported PRC Aid by Year, 2002-2007 2002 51 2003 1,482 2004 10,485 2005 10,106 2006 27,518 2007 25,098
Chinese investment in the US is quite significant, but direct investment is tiny
- Chinese FDI marginal share of total inward FDI stock in the US - However, problem with data from BEA for analysis: huge time lag, BOP methodology, doesnt capture flows through offshore financial centers, suppression of data, not all metrics, etc.
So what we did: compiled our own dataset: bottom up approach Upsides: Results: Clear inflection in past 2 years: (...)
- Other metrics that we present: distribution by state, by ownership!
PRC Aid by Year and Region, 2003-2007 US$ 25,098 million
Global Net ODA in 2010 http://webnet.oecd.org/oda2010/
Geographical Distribution of China’s Foreign Aid Funds in 2009 By the end of 2009, China provided a total of US $39.47 billion in aid to foreign countries. Source: White Paper on China's foreign aid issued by China's Information Office of the State Council on April 21, 2011
China’s trade with U.S. 283.679 101.959 2001 China joins the WTO Total trade in 2010: $385.6 billion Exports Imports
China’s share of trade in U.S. 2000 vs. 2010 17% 14% 2000 2010 $ 2,723.5 bn $438.3 bn China's surplus $29.8 bn China's surplus $181.7 bn
U.S. apparel prices goes where when import prices have risen lately?
Chinese Portfolio and Direct Investment in the US, 2009* USD bn, direct holdings only Source: US Treasury, BEA, RHG, *portfolio investment data from mid-year 2009 and FDI data from end-year 2009
Value of U.S. imports of wooden bedroom furniture, by import country "To avoid a 2005 U.S. tariff on Chinese-made wooden bedroom furniture, Chinese furniture companies moved operations to other Asian countries, thwarting U.S. efforts to curb “dumping,” the export of goods at unfairly low prices
Conclusions 1. US booming for Chinese investors: but that’s not the story people hear 2. The driver is profit, the barrier is business acumen, but the scapegoat is CFIUS 3. US policy is functions well, the politics are frequently rash and capricious. With Chinese FDI booming and US politics neurotic, severe tensions are certain – unless misgivings can be resolved 4. More than $1 trillion Chinese OFDI by 2020: the local and macro stakes are serious
Recommendations 1. Send a clear and bipartisan message that Chinese investment is welcome 2. Systematize the promotion of FDI from China and elsewhere 3. Protect the investment review process from interference 4. Work to better understand Chinese motives 5. Communicate to China its share of the burden 6. Remain open to “what if” scenarios 7. Do not play the reciprocity game 8. Get our own house in order