Flatirons

Friday, July 1, 2011

More Chinese Overseas Investments in the Mix

The past week has seen a number of announcements regarding Chinese investments overseas:
  • New World Hospitality, a Hong Kong-based holding company, acquired Dallas-based Rosewood Hotels for a reported $229.5 million;
  • Chinese companies executed trade deals with German companies this week worth a total value of $15 billion USD, including a $7.5B order for a (lucky number) 88 Airbus 320s; and
  • UK and PRC companies signed $2.3 billion worth in deals, including a $1.5B loan from Bank of China to British gas company BG Group.
For comparison, as part of a Sino-Franco deal ceremony, companies from both nations locked in about $20 billion in trade, while the US inked China deals worth $45B back in January.  What's more, the PRC also agreed to back off of preferences given to Chinese companies in government contracts, a commitment the PRC leadership seems to have honored today.

Two aspects of these transactions are troubling.  First, the lack of money headed towards the United States.  Second, at least one of the US deals involves technology transfers of the sort that Siemens and Kawasaki now regret.  To sum up, I am more than a little concerned that US companies are more concerned with short-term infusions of cash than long-term viability.

4 comments:

farmland investment said...

And don't forget, massive Chinese investment in Australian farmland.

Micah said...

Yes, there certainly is quite a bit of that now, isn't there? I suppose when you have FIRPTA and AFIDA to contend with in the US, you look for other places to park your money.

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