China is bullish on the U.S. economy.
The world’s most populous country is in the midst of a wave of purchases and investments in American companies.
The influx of Chinese capital is welcomed by some economists, while others fear the increasing influence of the rising superpower.
“There are a lot of Chinese companies that are interested in coming to America and buying companies,” said Siva Yam, president of the U.S.-China Chamber of Commerce. “We have seen an increasing trend of Chinese companies investing in America.”
A number of Chinese firms have too much money not to invest, Mr. Yam said, and increasingly they are looking beyond their own shores for opportunities.
The $2.6 billion sale of U.S.-based theater chain AMC Entertainment last week to the Dalian Wanda Group is the latest — and most expensive — example of a cash-rich Chinese company making a splash, this time in the U.S. entertainment industry.
Chinese investors also are looking for openings in U.S. manufacturing, technology, financial services and real estate.
Dalian plans to spend another $500 million in upgrades to AMC’s more than 5,000 screens in 346 locations across the U.S. and Canada.
“It was simply worth it,” Dalian Chairman Wang Jianlin told the Wall Street Journal.
He also said his company is interested in investing in film production, luxury hotels and retail stores in the United States.
For AMC, the sale is a logical next step. The movie chain had struck a deal two years ago with China Lion Film Distribution to bring 15 popular Chinese films per year to American theaters.
Earlier in the month, China also made headway in the U.S. banking industry. The Federal Reserve approved the sale of the Bank of East Asia U.S.A., an American company, to China’s largest bank, Industrial and Commerce Bank of China Ltd.
“A lot of Chinese companies [had initial public offerings] in Hong Kong, so they were sitting on a pile of cash and they needed a return to support the stock price,” Mr. Yam said. “In order for them to justify the stock price, they need to look for opportunities. In China, they don’t see many right now. It is not as profitable as in the past, so they are looking for opportunities in America.”
Despite a rocky few years for the U.S. economy, the Chinese see America as a sound investment.
“Chinese people feel that the United States is the most stable economy in the world,” Mr. Yam said.
Mr. Yam said investment in America is great for the U.S. economy.
“Everyone is interested in Chinese investment in their city,” he said. “Our economy is down, but in China, the economy continues to be strong and so they have a lot of money to spend and they need to spend to stay competitive.”
Mr. Yam acknowledges some American economists and manufacturers worry that foreign ownership could backfire — especially if U.S. jobs are shifted overseas.
“That is a fear particularly for the Midwest, because the Midwest is a manufacturing hub,” he said.
China is home to some of the world’s cheapest manufacturing — an economic reality that could be hard to resist for firms looking to outsource American products.
“If they can do the production in China, they can lower the costs and make the company more competitive,” Mr. Yam said.