In return for more investment in the U.S., China should open up its own markets
July 10, 2017 Category Foreign investment, Weekly
If China wants to invest a lot more in the U.S., Washington should ask Beijing to grant wider market access and fairer treatment to American businesses in return, according to members of the U.S. investment community. Investment is likely to be discussed during a U.S.-China economic dialogue scheduled for this summer. An investment treaty between the world’s two biggest economies has been discussed since 2008, but differences have been hindering the treaty’s signing. As Chinese businesses are eying investment opportunities in the U.S., it could potentially offer Washington new leverage with China to open up its domestic markets to foreign access, according to observers. Kenneth Jarrett, a former senior diplomat and the President of the American Chamber of Commerce in Shanghai, said equal access to markets would be leverage to “address some of the issues here”. China registered record high outbound investment of USD170 billion last year. Its investment in the U.S. tripled to USD46 billion, compared with USD14 billion of American investment in China, according to the Rhodium Group. 79% of Chinese investment in the U.S. was made through acquisitions, which makes it vulnerable to national security reviews by the Committee on Foreign Investment in the U.S. (CFIUS). The reviews led to lower investment in the politically-sensitive information, communication and technology sector of USD3.2 billion last year, compared with USD5.8 billion in 2014, the South China Morning Post reports.
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