US should open doors to Chinese investment: report

Chinese direct investments into the United States, which is more than doubling annually with over $5 billion in 2010 alone, could create thousands of jobs and drive economic growth in the US, if only the administration acknowledges the gains of such FDI, a new report says.

The report, prepared by Asia Society's Center on US-China relations, the Kissinger Institute on China and the Woodrow Wilson International Center for Scholars, forecasts Chinese investments in greenfield projects or mergers and acquisitions worldwide to grow to $1-2 trillion by 2020 - a four- to eight-fold increase from the current $230 billion.

If the US could attract even five per cent of those investments, it would be an enormous amount, according to the report's authors, economists Daniel H Rosen and Thilo Hanemann of The Rhodium Group.

The authors estimate that Chinese firms in the United States have already created more than 10,000 jobs, but the US screening policy for inward investment and political interference threatens to divert legitimate and potentially beneficial investments from that country.

They liken the current phobia of Chinese investments to the American fear of Japanese economic domination in the 1980s.

"Japanese investment in the United States during the 1980s was as controversial as China's," the authors say, "but in the following years, US affiliates of Japanese companies invested hundreds of billions of dollars in the United States, and today employ nearly 700,000 Americans."