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Chinese Companies in U.S. High-Tech Sectors

Author

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  • Margarita Konstantinovna Perova

    (Center for North American Studies, Primakov National Research Institute of World Economy and International Relations Russian Academy of Science)

Abstract

Over recent years a new wave of ChinaÒs direct investments in the U.S. high-tech sectors has attracted great attention. These investments are crucially important as the sector is a major asset to both competitiveness of the economy and national security. The article analyzes the factors driving ChinaÒs investment activity abroad and also the main components of the strategy implemented by the national companies. ChinaÒs growing foreign direct investment/FDI has been driven mostly by the deterioration in the domestic operating environment, a more open policy for outward FDI and also the facilitating role of the state. Motivated by the acquisition of technology, Chinese companies have significantly increased their investments in the U.S. high-tech industries (ICT, health care and biotechnology, automotive and energy sectors). But the main goal of Chinese investors is not generating profit that would have corresponded to the market economy. Investment is one of the means for China to accomplish its technology transfer goals. In response to macroeconomic pressure in 2017 China abandoned plans to liberalize its capital account and is now exercising tight oversight of outbound investment flows. US legislative measures adopted by the Foreign Investment Risk Review Modernization Act of 2018, the Export Control Reform Act of 2018 and tariffs impacted negatively on ChinàÒs investment in the U.S. economy. The potential for Chinese outbound investment growth remains large, but the political uncertainty in both countries hinders its realization

Suggested Citation

  • Margarita Konstantinovna Perova, 2020. "Chinese Companies in U.S. High-Tech Sectors," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 139-155.
    • Handle: RePEc:far:spaeco:y:2020:i:3:p:139-155
    DOI: https://dx.doi.org/10.14530/se.2020.3.139-155
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    References listed on IDEAS

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    1. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2009. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(2), pages 353-354, February.
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    More about this item

    Keywords

    foreign direct investment; Chinese companies; high-tech industries; competitiveness; national security; technology transfer; profit; mergers and acquisitions; strategy; USA;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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