Chinese investment in the United States hit an all-time high in 2016. That year, Chinese companies invested $46 billion in the country, more than triple the $15 billion investment in 2015. Just 12 major metropolitan areas attracted nearly half of all Chinese investment in the country since 2000.
To determine the U.S. cities where China is investing the most, 24/7 Wall St. analyzed data from the 2017 update to the nonprofit organization National Committee on U.S.-China Relations and economic research firm Rhodium Group’s New Neighbors report. Estimates are based on the Rhodium Group China Investment Monitor, which since 2000 has tracked all new Chinese greenfield projects, acquisitions of existing U.S. assets, and stakes in U.S companies worth 10% or more.
With $13.9 billion in Chinese investment since 2000, the New York-Newark-Jersey City metro area is the top city for Chinese FDI.
Most new Chinese investment is in the form of mergers and acquisitions. Many Chinese investors purchase existing U.S. companies and maintain operations. One of the largest such acquisitions last year was the purchase of California-based Legendary Entertainment by Chinese conglomerate Dalian Wanda for $3.5 billion, the largest deal ever completed between Chinese and American parties in the motion picture industry.
The types of foreign direct investment that U.S. cities attract often reflect regional economic strengths. In the San Francisco metro area, for example, Chinese investment is largely focused on high-tech companies in Silicon Valley. In the Houston metro area, Chinese investments are primarily in the energy industry.
The total number of Americans employed by Chinese-owned companies in the United States rose to 141,000 in 2016, an increase of 50,000 from the year prior. While in many of the top cities for Chinese investment thousands of American workers are employed at Chinese-owned enterprises, the number of employees varies heavily among the cities on this list. Cities with large Chinese real estate holdings and other capital-intensive investments may have fewer workers than in cities where Chinese investments are more labor intensive.
For example, while the San Antonio metro area attracted the seventh most Chinese investment of any city, the 590 jobs supported by Chinese-owned establishments in the metro area ranks 34th. The discrepancy is likely due to the fact that much of the foreign direct investment in the area is in oil and gas fields, which require less human labor than businesses in sectors such as technology and consulting.
While Chinese investment reached an all-time high last year, the trend may not necessarily continue. Both U.S. and Chinese leaders have made public calls for increased scrutiny on deals between the two countries, with China citing the need to reduce capital flight and U.S. citing potential security concerns from increased Chinese presence in the American economy. In their annual report to Congress, the U.S.-China Economic Security Review Commission recommended a ban on Chinese state-owned enterprises from buying U.S. companies.
To determine the U.S. cities where China is investing the most, 24/7 Wall St. analyzed data from the 2017 update to the National Committee on U.S.-China Relations and Rhodium Group’s New Neighbors report. Data was aggregated from the 115th congressional districts to the county and metropolitan area levels using geographic definitions from the U.S. Census Bureau. As specific figures were not provided for Congressional districts in which Chinese investment totalled less than $50 million, jobs totalled less than 10, and operations were fewer than five, we excluded such districts from our analysis. Congressional districts do not align perfectly with county borders, and in some cases metropolitan level estimates may include Chinese investments located just outside metropolitan statistical area boundaries. The data is based on estimates from Rhodium Group’s China Investment Monitor, which since 2000 has tracked all new Chinese greenfield projects, acquisitions of existing US assets, and stakes in U.S companies worth 10% or more. Population data came from the U.S. Census Bureau’s American Community Survey and are for 2015.
These are the cities where China is investing the most.