Chinese investment in the US booming but threatened by Trump: report

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China's direct investment in the US will keep growing in 2017, but likely developments in trade policy under Donald Trump as well as Chinese moves to limit capital outflow pose major downside risks, according to a US consulting firm.

Chinese companies invested a record 45.6 billion US dollars in the US in 2016, tripling the amount in 2015, said the Rhodium Group in a new report.

Although mergers and acquisitions remain the primary Chinese investment in the US, green-field investment is growing fast, the report said.

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The rising Chinese investment to a certain degree reflects China's economic restructuring. "In contrast to the dominance of fossil fuel investments before 2013, more than 90 percent of Chinese FDI (foreign direct investment) in 2016 was targeting US services and advanced manufacturing sectors," according to the report.

Sectors including real estate and hospitality, information and communications technology, entertainment, and financial services continued to attract Chinese investors.

The report forecast that Chinese investment in the world’s largest economy will grow again in 2017, because Chinese companies are keen to upgrade technology and build out brands.

A stable US economic outlook and the appreciation of the US dollar have also played a role in boosting Chinese investment.

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However, the report warned that political realities may erect a road block for some would-be investors.

"Chinese investors also face greater uncertainty and political deal risk in the United States in the aftermath of the Presidential election," the Rhodium Group authors wrote.

President-elect Donald Trump's cabinet appointments suggest a more confrontational approach to trade and investment policy toward China.

In addition, China is tightening administrative controls on certain types of transactions amid rising capital outflow pressure, which could also threaten Chinese investment in the US, the report added.