Chinese Investment in the U.S. Continues to Grow

July 10, 2013 09:32 by Clayton Reeves in Agriculture, Capital Markets, M&A  //  Tags: , , , , ,   //   Comments (0)

Despite political, regulatory, cultural and geographic obstacles to Chinese firms investing in the U.S., they continue to do so at a growing rate.

Chinese figures show that their investment in the U.S. grew to $9.3 billion in 2012 from $1.88 billion in 2007. U.S. figures were even more extreme, concluding that the cumulative investment jumped from $3.4 billion to $22.8 billion in the same period.  The recently proposed acquisition of Smithfield Foods by Shuanghui International for $4.7 billion would represent the largest ever acquisition of a U.S. firm by a Chinese entity. Additionally, this acquisition could represent a threat to the U.S. food supply, which has generally been more protected through regulatory issues due to national interests. With many of the food related issues that Chinese firms have faced, either in the pet or human food arena, there is concern from regulators about the acquisition of Smithfield.

Regardless of how the Smithfield acquisition turns out, one fact remains: the Chinese are interested in purchasing U.S. companies moving forward and have the dry powder to do so.  It will be interesting to see how this changes the M&A landscape moving forward.

Click here to read the article this post references in the China Daily.

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