President Donald Trump has made keeping jobs in America his top priority. It was the issue that helped propel his remarkable victories across the Great Lakes, and while healthcare and taxes have recently claimed the headlines, jobs for Americans is still a prime focus for the President.
Ironically, one of the most effective ways to keep jobs in the United States is through Chinese investment.
It is foolish not to recognize there are challenges with our commercial relationship with China. From lax intellectual property rights protection to over 100 sectors of the Chinese economy being off-limits or heavily restricted to American companies. However, it is hard not to recognize that Chinese investment continues to grow and continues to have a substantial impact on the American economy.
Foreign direct investment in the United States reached a record $348 billion in 2015. The world wants to invest in America to reach our consumers and be a part of the most dynamic and largest marketplace on the planet.
According to the Rhodium Group, the United States became the primary beneficiary of booming Chinese outbound foreign direct investment in 2016, with $45.6 billion worth of completed acquisitions and greenfield investments. Cumulative Chinese direct investment in the U.S. economy since 2000 now exceeds $100 billion.
Furthermore, a new report from Rhodium and the National Committee on U.S. China Relations put the total number of Americans employed by Chinese-affiliated U.S. companies at 141,000, a 46 percent increase from 2015 and more than nine times higher than that of 2009. Critics of this increased investment, including some Members of Congress, cited national security concerns – and those deals in sensitive industries should be scrutinized. Importantly, there is such a review process in place led by the Committee on Foreign Investment in the United States (CFIUS) – an inter-agency government panel that has the power to impose conditions and reject deals if they threaten national security.
But short of rejection by CFIUS, Chinese investment should be welcomed and indeed encouraged. While federal officials are often the most critical of Chinese investment for political expediency, governors, state officials, and mayors rightly recognize that Chinese investment creates and keeps jobs in their local economies. Prospective investments from China should be free from frivolous political interference and limited to legitimate national security concerns. Example after example in states and cities across America bear this out.
Fuyao Glass is a textbook example. The Chinese manufacturing company acquired an old assembly plant near Dayton. With a production capability of 4 million cars a year, double the current level, many in the auto industry predict this will require a workforce of 2,500 people, up from 1,700 now.
Just last month, the shareholders of MoneyGram International, headquartered in Texas, voted overwhelmingly their support of the merger between MoneyGram and Ant Financial, a private Chinese entrepreneurial technology company. The deal will allow Ant to invest significant capital and resources in MoneyGram, including growing the company's U.S. workforce and providing growth opportunities to employees and customers worldwide. While the deal is still being review by CFIUS, Ant remains no stranger to such regulatory approvals. Last year, the company acquired Kansas City-based security technology company EyeVerify. Since that closing, the acquisition has led to a significant expansion of EyeVerify's business and an increased number of American jobs.
In Alabama, Chinese investment has helped put rural America back on track. In 2014, Golden Dragon Precise Copper Tube Group opened its first U.S. plant in Wilcox County, one of the poorest counties in America. The investment created 300 jobs, and 40 more were recently announced. According to Sheldon Day, mayor of Thomasville, “Now, we have a Chinese product that was previously made in China that's now being made by Alabamians."
But it's not just local officials who recognize the benefit of Chinese investment. One of the most outspoken advocates has been Henry M. Paulson, Jr. former U.S. Treasury Secretary and advisor to President Trump. While he admits that the idea of any foreigners buying U.S. assets has never been popular, he argues that “the highest compliment anyone could pay the United States is to make a direct investment, which is a vote of confidence in our economy."
President Trump and his Administration will soon be faced with deciding the future of Chinese investment in America. Given his pledge to keep jobs in the United States and grow the economy, the decision to encourage job retention and growth should not be hard.
Marc A. Ross is the founder of Caracal Global, an adjunct professor at George Washington University teaching a course on Globalization and American politics, and former communications director for the US-China Business Council. Ross has extensive experience in business development for companies as well as leading the advocacy operations, fundraising programs and communications efforts for nonprofits, trade associations, corporations and political campaigns, many for the highest offices in the United States and the United Kingdom. You can find him on Twitter at @marcaross.