All politics is local, goes a popular American saying, but when it comes to Chinese investment in the United States, it is almost always national. The latest update to the China Investment Monitor by the Rhodium Group, a New York-based advisory firm, offers a unique look at the steady march of Chinese investment in the United States by breaking the flow of investment by state.
Investment in the first three quarters of 2013 has already surpassed last year’s figure at $12.2 billion worth of deals. A big chunk of that is accounted for by the May agreement by Chinese meat giant Shuanghui International to acquire Virginia’s Smithfield Foods. At $4.7 billion, it is the largest ever acquisition by a Chinese firm.
The California Governor’s Office for Business and Economic Development has the only state-level organization website with a list of investment opportunities available to foreign investors. Unsurprisingly, California has been the top recipient of Chinese investment projects in the United States by number of deals since 2000; Texas leads by value thanks to large energy deals.
Entertainment and real estate, consumer products and services, and industrial and electronic equipment have been the largest recipients by industry. Nearly 70% of the 700 deals tracked since 2000 have been greenfield investments as opposed to acquisitions and only 26% have been by government-owned firms.
American governors and local politicians are increasingly taking their sales pitches directly to China. In the past year, governors from states including California, Michigan, Illinois, and Wisconsin have all led trade missions to drum up business for their states. However contentious the federal debate on Chinese investment may remain, local politicians are making it clear their doors and wallets are open.
Update: an earlier version of this piece used cumulative deal figures through 1H 2013 for acquisitions by type and owner.
This article appears in the November 2013 issue of China Hands.