China finds fertile investment ground in US Midwest

The US Midwest is becoming a productive destination for Chinese investment.

"In recent years, the Midwest is growing into an important region for Chinese investment in the United States," said Xu Chen, president and CEO of the Bank of China USA and chairman of the China General Chamber of Commerce (CGCC) – USA.

Xu spoke during the CGCC Chicago 2017 Annual Gala themed New Era - Opportunities & Challenges in US - China Economic Cooperation in Chicago on Thursday.

Xu pointed out that up until 2016, Chinese companies had invested more than $20 billion in the nine states of the Midwest region, accounting for over 20 percent of overall Chinese FDI volume in the US. The investment has created more than 45,000 local jobs so far.

Hong Lei, China's consul general in Chicago, said that since China launched "China Manufacturing 2025" in 2015, its manufacturing industry has undergone a full-scale upgrade.

And as a center for cutting-edge manufacturing for many years, the US is now experiencing an industrial rehabilitation.

"It is a good time for Chinese enterprises to cooperate more closely with the US," he said.

In March, CGCC - USA conducted its fourth annual business survey among 213 Chinese company executives operating in the US. The survey generally covers a broad range of topics, including the respondents' performance in 2016, their assessment of the US operation, the regulatory environment and their future business plans.

The survey indicated that Chinese companies continued to grow their US businesses in 2016. At least half of the surveyed companies reported that their revenue in the US has increased each year from 2013 to 2016. Notably, 24 percent of the surveyed companies saw their US revenue grow by more than 20 percent in 2016.

Meanwhile, difficulties such as the perception of unfair US government regulatory enforcement, financing and tax levies still exist, "but the situation is improving", said Xu.

The percentage of the respondents facing difficulties in financing their US operations has decreased. Xu said it might be attributed to support from the Chinese banks in the US as well as the investors' own improved credit records in the US. And Chinese companies are making more sense of the US tax system and gaining benefits from its financial markets.

Xu said that despite various challenges, 60 percent of the respondents of the survey expressed confidence and optimism about their investments in the United States. The majority are committed to making long-term investments, and their business plans are less influenced by short-term volatility in China-US relations.

"Since China and the US economic structures are highly complementary and supplementary, our cooperation is full of opportunities and can bring more benefits to job creation, consumer welfare and economic development," he said.

"Now it is time to explore this enormous potential by further opening up bilateral markets and promoting two-way investment at both the national and subnational levels," he said.

In April, US President Donald Trump and President Xi Jinping met in Florida and agreed on a 100-day plan to improve trade ties and boost cooperation between the US and China.

The event was hosted by the China General Chamber of Commerce – USA Chicago (CGCC Chicago), in partnership with the China Investment Promotion Agency of the Ministry of Commerce and World Business Chicago, with an aim at promoting US exports to China and attracting Chinese investment to the Midwest US.

More than 800 government officials and business leaders from China and the US attended the event, including commercial and business affairs officials from the Chinese embassy in the US, US federal agencies, state governments in the Midwest and the municipal government of Chicago, and a delegation from China, discussing issues related to trade and investment and cooperation between the US Midwest and China.