Learning the rules of the game
From 2003 to 2010, Chinese enterprises made investments in at least 35 U.S. states. However, until 2009, China's total direct investment in the U.S. could only match that of countries such as New Zealand and Austria.
The transformation of China's economic development has encouraged many companies to go overseas, so why is its scale of investment relatively small? Possibly because Americans hold different views about whether to welcome China – or keep it at arm's length.
The U.S. Asia Society reported that it was not optimistic about the prospects of Chinese investment in the U.S. It argued that the U.S. believes Chinese investment is largely driven by political reasons rather than profit motive, and that many Chinese enterprises are connected to the Chinese government.
An executive from Huawei Technologies Co Ltd said the company is interested in expanding in the U.S., but restrictions due to political reasons are a major challenge. For example, in February 2011, Huawei failed in its acquisition of server technology company 3Leaf because the U.S. considered it a security threat.
Though national security is still an issue, more and more Chinese enterprises are now learning to play American politics and cater to the needs of the ruling party. For example, in appealing to the Democratic Party, which focuses more on medical treatment and public health, Tasly may emphasize the lower prices and fewer side effects of its products; in dealing with the Republican Party, the company may stress the number of job vacancies and increasing taxes it would create.
Chinese influence growing
Haier was one of the first Chinese enterprises to enter the U.S. market. Now found in university dormitories and hotel rooms all over the country, mini-refrigerators made by Haier U.S. have become standard. In some American mansions, Haier luxury refrigerators are also a top choice.
Apart from household appliances, large American construction projects have also started favoring Chinese enterprises. In 2003 there were many doubts and questions about Chinese construction enterprises, but after many high quality projects were completed at a rapid speed, Americans began to change their views – some even praised the Chinese builders as responsible and competitive.
In fields such as telecommunications, Huawei and ZTE have also made tremendous progress. Huawei has set up joint research laboratories with Motorola and Intel, and gradually launched a patent strategy. Early this year, Huawei was accused by Motorola for an intellectual property infraction, yet Huawei won the case in the end, forcing Motorola to pay user fees.
The U.S. Asia Society anticipated that China's ODI is set to explode, with assets reaching between $1 trillion and $2 trillion worldwide by 2020.
