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Investment in US hits record level for Chinese

Updated: 2013-01-01 02:50
By Chen Weihua in New York (China Daily)
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Chinese foreign direct investment in the United States hit record levels in 2012 and shows little sign of slowing, despite lingering worries among some that the inflow of Chinese money presents a growing security risk to the country.

Chinese companies concluded deals worth $6.5 billion in 2012, an increase of 12 percent from the record $5.8 billion in 2010, according to a new report by New York-based Rhodium Group, which tracks Chinese FDI.

Thilo Hanemann, Rhodium's research director, said he believes the result reflected both the growing determination of Chinese firms to expand overseas, and the attractiveness of US markets and assets to investors.

The most appealing US sectors to Chinese investors were oil and gas exploration, advanced manufacturing that helps Chinese firms move up the value chain, and assets that allow investors to gain solid returns such as utilities, real estate and hospitality, according to the report.

Headlining the year's activities were Dalian Wanda Group's $2.6 billion acquisition of AMC Entertainment, the second largest US theater operator, Sinopec Corp's $2.5 billion investment in a third of Devon Energy's five shale gas assets in the US, and auto parts maker Wanxiang Group's $420 million investment in GreatPoint Energy, a company based in Cambridge, Massachusetts, that converts coal into cleaner-burning natural gas.

Meanwhile, a number of major Chinese FDI deals are still awaiting regulatory approval in the US, signaling that the growth is expected to continue into 2013.

For example, a group of Chinese investors has agreed to buy an 80.1 percent stake in American International Group's aircraft leasing unit for $4.2 billion, and Wanxiang has already been announced as the winner of a bid for battery producer A123 Systems, in a bankruptcy auction.

The Rhodium report highlights that the fast-growing Chinese FDI was in fact one of the few bright spots in a gloomy year for the US economy, which has seen overall global FDI decline sharply since 2009 and the outbreak of global financial crisis.

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