The weak U.S. dollar and weakening U.S. economy have made the United States a bargain for overseas companies shopping for investments, says The Washington Post. And China is quickly becoming one of the leading nations seeking to invest.
Last December, China Investment Corp. purchased a USD5bn stake in
Morgan Stanley, while in October, Citic Securities announced it will
invest USD1bn in Bear Stearns.
The fragile U.S. housing market has forced mortgage-related investment
banks and policy makers to find solutions, and, thus, the biggest deals
in recent months have involved Wall Street firms affected by those
losses.
In 2007, acquisitions in the United States by foreign ventures hit
USD407bn, up 93 per cent on 2006, according to Thomson Financial. In
addition to the well-known investments, private Chinese individuals are
also buying out smaller companies across the United States.
Yu Dan, a representative for the state of Pennsylvania in China, says
that at least six companies in Pennsylvania are in the process of
closing deals in industries ranging from food to raw materials.
Another state that has attracted many Chinese buyers and companies
because of its cheap land is South Carolina. As we reported last week , American Yuncheng Plate Making Inc. will set up a USD10m, 30,000 square feet plant in Spartanburg and Zhou Jiaru, a Chinese
entrepreneur who owns an auto parts factory in Wenzhou, recently
purchased an auto-part refurbishing factory in the state.
While the money invested in the United States from China is still
limited – USD9.6 bn in 2007, up from USD66m the previous year, according
to Thomson Financial – it is rising significantly, and with Chinese
firms both richer and more aware of potential bargain buys in the
United States a concerted shopping spree may be up ahead.
Last update : Wednesday, 30 January 2008
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