China entering new era of foreign trade

Chinese direct investment in the US has come a long way since the establishment of diplomatic relations between the two countries.

During the first 20 years after the establishment of Sino-US diplomatic relations in 1979, Chinese investment in the US was almost negligible compared to US investment in China, according to Zhao Zhenge, general representative of the China Council of Promotion for International Trade (CPPIT) USA.

"But in recent years, there has been considerable attention to a new wave of Chinese direct investment entering the United States."

Zhao spoke as Chinese delegates to the Sino-US Joint Commission on Commerce and Trade (JCCT) gathered at the Business Dialogue on Investment in America conference on Monday in Washington.

"China is entering a new era emphasizing the role of foreign trade," Zhao said. "We hope to serve as a window or a platform to establish the business ties between the two countries."

CPPIT, along with the China Chamber of International Commerce and Greater Washington China Investment Center, hosted the conference to provide information about US regulations, law enforcement, investment risks and offered a few case studies for potential investors to think through before putting their money into the US market.

The direct Chinese investment in the US exceeded the US investment in China for the first time in 2015. By the end of 2015, Chinese investment has reached $46.6 billion and created more than 100,000 jobs in the US, Zhao said.

"And according to the forecast, Chinese investment in the US will exceed $30 billion in 2016," he said.

"More and more Chinese companies are now looking forward to making investment here in the US, including the delegation we have here with us today."

Case studies of Tranlin Inc, known as Vastly in the US market, and JD.com were presented during the second panel, themed Success Stories and Outlook.

Tranlin Inc, a paper-manufacturing company based in East China’s Shandong province, broke ground on its first US operation, a $2 billion plant in Chesterfield County, Virginia, last year. The company plans to employ about 2,000 people by the end of 2020.

"We came up with our internationalization strategy after more than a half year’s research and decided to make the US our first overseas stop," said Jerry Peng, CEO of Vastly.

"The logic is simple: The US is the world’s largest consumer market. It’s a better choice in terms of both market size and profit margin."

The lower energy and land costs in the US also appeal to Chinese investors, especially for a manufacturing company like Vastly, Peng said.

"I believe Select USA is not only about coming to the US to invest, but also about selecting US products and services and bringing them back to China," said Jianrong Ma, global vice-president of JD.com.

Ma said the company hopes to open a channel for US brands to enter the Chinese market, he said.

"Business activities between the United States and China, the two largest economies in the world, influence trade patterns and economic activity across the globe and constitute a major component of global activity," Zhao said.

"The US is a rather big country," said US Department of Commerce SelectUSA Program Officer John McKiel, "which makes the investment environment complicated for the investors especially foreign investors".

"We are here to help you understand the US before making any investments here. Since the laws, regulations and policies vary from state to state, we offer you representatives specialized in different states whom you may contact," he said.

Yuan Yuan in Washington contributed to the story.