Chinese Investors 'Rescue' Small U.S. Companies 'From a Very Tough Economy'

Detail view of China's 100 yuan note. (David Dennis/Flickr)

U.S. companies recieved $5 billion in Chinese investments in 2010, but it "may be only the beginning of a tidal wave of direct Chinese investment in American businesses," James Flanigan wrote yesterday in a New York Times article on Asia Society's recently released special report, "An American Open Door?"

"An American Open Door?" is a special report undertaken by Asia Society's Center on U.S.-China Relations and the Kissinger Institute on China and the United States at the Woodrow Wilson International Center for Scholars, which examines Chinese foreign direct investment (FDI) in the U.S. and its potential to create economic growth.

The report launched in Washington, DC  on May 4 with a public event that featured opening remarks by U.S. Commerce Secretary Gary Locke.

In his Times piece, Flanigan describes the mutally beneficial nature of these investments:

While there is some concern that political tensions could get in the way, the investment money is a huge opportunity for American businesses. ...small businesses, already the beneficiaries of such investments, illustrate the aims of Chinese investors and the benefits that American companies can take from them — including rescue from a very tough economy.

Why have Chinese companies started direct investments instead of trying to attract foreign investments as they have in the past? The article quotes Stephen C. Kircher, founder and chief executive of Solar Power, Inc., one of four companies in the article that has recieved Chinese direct investments:

"Their aim is to employ Chinese people," Kircher said. "They will integrate their manufacturing with marketing and distribution on our solar panel projects and then have the know-how to help them in the emerging domestic economy in China."

Read the complete New York Times article