June 29, 2018

As Trump Administration Caves on Planned Restrictions on Chinese Investment in U.S., Public Citizen Database Reveals China Increasingly Uses U.S. Acquisitions to Achieve ‘China 2025’ Objectives

18 Chinese Government Entities and Government-Connected Private Sector Firms Account for More Than 60 Percent of Chinese Investment in U.S. between 2002 and 2017

WASHINGTON, D.C. – The Trump administration again backed down from its tough-on-China-trade rhetoric by cancelling its plan to announce major restrictions on Chinese investment in the United States Public Citizen’s Global Trade said today as it released new data showing 56 percent of Chinese investments in the United States last year were in industries that China defines as “strategic,” up from 25 percent in 2016.

Public Citizen’s new data show that since 2002, Chinese interests have acquired almost $145 billion worth of U.S. assets in 40 U.S. states and territories and most were acquisitions of existing businesses, not greenfield investment (investment to establish new businesses). Eighteen out of the top twenty Chinese investors in the United States are connected to the Chinese government (sovereign wealth funds, state-owned enterprises and state-linked conglomerates) and they account for more than 60 percent of total Chinese investment dollars since 2002. Chinese investments have shifted from trophy real estate to strategic acquisitions in “China 2025” priority sectors including aviation, biotechnology and new energy vehicles.

The database covers only investment deals of $50 million or larger, meaning that the $170 billion in total investment activity (including $25 billion in greenfield deals) invariably misses some significant Chinese investment.
                                                                                                                                    
“Unlike tariffs, investment restrictions were a relatively uncontroversial tool to challenge the status quo of China recycling its sizeable dollar reserves accumulated from years of large U.S. trade deficits with China to acquire U.S. assets that advance its China 2025 plan to dominate the industries of the future,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “The administration backing down from limiting Chinese investment here, most of which is by the government or government-linked entities, once again reveals the cynical gap between President Trump’s rhetoric and his actions.”

The website, unlike other China investment databases that include a similar level of detail, is free to use. It spotlights how deeply invested China is in the U.S. economy. To create this publicly available compilation, Public Citizen’s Global Trade Watch used media reports, regulatory filings, company reports, press releases and other sources to develop a bottom-up, transactions-based approach that complements balance-of-payments data on investments.

The downloadable dataset captures each transaction and can be viewed and sorted by year, sector, location, type (greenfield or acquisition), investing entity, target (for acquisitions only) and overall deal value. The database also provides a link to additional information on each transaction. Only completed transactions are represented.

To explore the Chinese Investment in the United States Database, visit https://www.citizen.org/chinese-corporate-investment-database.


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