That’s worrying some Washington officials, who fear that the United States is selling off valuable assets to the Chinese, ultimately at the expense of American jobs.
Rep. Cliff Stearns, R-Florida, has warned that Wanxiang’s investment in A123 could end up as a transfer of taxpayer-funded intellectual property to a “foreign adversary.” The battery maker was the beneficiary of a $249 million clean-energy grant from the Department of Energy.
Meanwhile, both Democrats and Republicans have raised concerns about a massive $15.1 billion bid by the state-owned China National Offshore Oil Corp., or CNOOC, to buy Nexen Inc., a Canadian oil company with operations in U.S. waters in the Gulf of Mexico. As such, the agreement is subject to review by the Committee on Foreign Investment in the United States.
In 2005, CNOOC withdrew an $18.5 billion offer for American oil giant Unocal because of fierce political opposition in Washington. The deal’s collapse had a chilling effect on Chinese companies aiming to invest in the U.S.
One of the leading impediments then _ and now _ is the suspicion that Chinese companies act on behalf of China’s Communist Party rulers, rather than shareholders. State-run firms represent about 90 percent of Chinese outbound investment, according to the Heritage Foundation.
China contends that this investment has kept American companies alive and created thousands of U.S. jobs. Chinese President Hu Jintao said as much during a visit to the U.S. last year, when he toured Wanxiang’s existing Illinois facility and met with other Chinese companies that had U.S. operations.
Compared with Japan and other economic powers, China’s foreign investment is still relatively modest. With global holdings estimated at $364 billion, China is on par with Ireland or Sweden, according to the research firm Rhodium Group.
Although China tops the list of nations holding U.S. Treasury bonds and other so-called liquid assets, it accounts for only about 3 percent of all foreign investment into the U.S., the world’s No. 1 recipient of such investments, according to Commerce Department figures. In 2010, foreign direct investment into the U.S. totaled $194 billion _ 84 percent of which came from six European countries, Japan and Canada.