Conglomerate Dalian Wanda Group paid $2.6 billion this year for the heavily indebted AMC Entertainment, one of the largest movie theater chains in North America. The deal gives Wanda a foothold in the U.S. entertainment industry and a chance to gain expertise in the day-to-day operations of movie theaters.
Just last month, Chinese auto parts giant Wanxiang Group Corp. announced plans to provide a $465 million rescue package for struggling battery maker A123 Systems Inc., based in Waltham, Mass. The agreement gives Wanxiang, one of China’s biggest private companies, a chance to buy a majority stake in a world-class battery developer for electric cars.
Chinese investments in U.S. companies hit a record of nearly $9 billion in 2007, according to separate data compiled by Dealogic, a research firm, and Derek Scissors, a Heritage Foundation analyst who follows Chinese investments. Their figures don’t include Chinese purchases of American bonds, private real estate purchases and many smaller acquisitions.
Nor do the data capture direct investments such as that announced this year by Uniscite Inc. in China’s Shanxi province. The maker of plastic films said it would build a new plant in Laurens County, S.C., to manufacture packaging products for the food industry.
Companies like Uniscite are being aggressively recruited by state and local governments, many of which have offices or representatives in China.
“We have a concerted effort to punch above our weight in China,” said Dan Hasler, commerce secretary of Indiana. He said the state has sent 14 different delegations to China in the last year to woo businesses.
Although China has tight capital controls, that nation’s government officials want companies to go after new technologies and diversify their markets.
“The Chinese government has given an implicit green light to reach overseas to secure assets that will help Chinese businesses thrive in the long term,” said David Wolf, the Beijing-based head of the Wolf Group Asia consulting firm.