According to O’Melveny’s 2016 Foreign Direct Investment Report, which summarizes investment executives’ responses to questions surrounding foreign direct investment, the environment for growth provided by the United States is driving many Chinese investments to the U.S. at a time when China’s economy, currency, and stock market have lowered investor confidence at home.
The Report’s respondents were mostly from companies headquartered in either China or Hong Kong, with 38% and 21% respectively, giving a snapshot Greater China’s investors’ opinions on the state of FDI. Overall, 84% of global respondents – which includes the Chinese and Hong Kong respondents – said that they will invest the same or a greater amount into the U.S. as compared to recent years, while the most attractive investment market was identified as the U.S. by 47% of respondents. Investors were largely interested in investment in both public and privately held companies, with two in three saying they will target either, but the American investment regulatory regime was seen as either the greatest barrier to investment, a view held by 48% of respondents, or as an attractive attribute, by 38% of respondents.
China was the source of investment capital for 55% of all respondents, but nearly three quarters of respondents had some level of American assets or investments. Of those with American assets or investments, 12% had a majority of their investments in the U.S., while another half had up to 5% in the country. When asked which locations outside of the United States were the most attractive targets for investment, 59% chose Western Europe, 56% chose Southeast Asia, and 18% chose Canada.