Thursday, May 18, 2017 | 9:00 AM EDT - 10:45 AM EDT
Citigroup |, New York, NY
Foreign direct investment (FDI) flows are an increasingly important dimension of U.S.-China economic relations. In recent years, U.S.-China FDI has evolved into a two-way street, with combined annual investment reaching almost $60 billion in 2016. China has also evolved from being almost exclusively the receiving partner in this process – through 2009, making annual investments in the United States that were only a fraction of U.S. investment in China – to the principal sending partner, accounting for more than three quarters of total bilateral investment last year.
Although there is still significant room for growth, recent political developments are changing the outlook. In the United States, the rapid increase in Chinese investment has rekindled concerns about the national security and economic implications of foreign acquisitions, driving the Trump administration and Congress to re-evaluate long-standing FDI policies. In China, concern among the leadership about capital flight has led it to restrict outbound investment. Simultaneously, in an attempt to reverse slowing inflows of FDI, Beijing is promising fairer treatment to foreign firms.
As part of the U.S.-China FDI Project, the National Committee on U.S.-China Relations and the Rhodium Group released an updated report reviewing last year’s investment data and the outlook going forward. Two Way Street: 2017 Update | U.S.-China Direct Investment Trends, breaks down bilateral investment sector by sector, and considers the challenges ahead as well as the options available to policy makers in Beijing and Washington. On May 18, 2017, the National Committee and Rhodium Group held a briefing to discuss the implications of the data, and provide analysis of recent policy changes affecting U.S.-China FDI.
This report is produced in conjunction with New Neighbors: 2017 Update, which takes an in-depth look at the footprint of Chinese investment by congressional district.