Has Chinese Investment Changed USA Economy Then and Now?

China saving a USA state was the slogan which made rounds during 2014 and created some amount of confusion within the economy of both countries. This still remains a talking point among business owners and lawyers because the number of Chinese investors that was anticipated to invest in the USA market did not meet its expectations. Some people believed it to be true while others believed that it was a fluke. But ultimately it was not the case and why? Read on..

  • China Could Not Save USA State- China did not save any US state. The Chinese population could not do it because their population was not up to the mark during that time. Even now only 188,153 Chinese are present in USA according to the 2010 Consensus report. With this kind of presence it is not possible to save the American economy in any way. It was thought that Chinese were buying houses and investing towards the USA economy to save it. But how would that have been possible?

  • USA’s Unemployment Rate- The unemployment rate in USA has decreased over time but China does not have any direct contribution towards it. It decreased by 4.9% according to recent survey.

  • Wealthy Chinese Buying Homes- Wealthy Chinese people bought homes in various USA states but there is no guarantee that this will continue for a long time because it did not in the past. In fact, there is no evidence to prove that the rate will not slash.

  • The Magazine Controversy- Certain magazines added fire to the controversy by stating that Chinese investors increased quite a lot since 2008 actually making a huge percentage of applicants. However, that does not mean a huge number of Chinese investors and hence they could not contribute in a big way. The scenario has not changed much since then until now.

  • Not a Game Changer- There has been no such massive investment from the Chinese side to change the game. Neither the experts nor the business owners could see it at that time. The situation remains the same because that sounds impossible even now. The point here is that some Chinese people are definitely buying homes in USA but not in numbers that could change the game. In addition, a large number of USA people are working in China owned factories in USA. However, mass exodus from China is not being noticed which could contribute to the USA economy. This does not say that the Chinese investment in USA is not developing but not to an extent that could change the economy and take it to the numero uno position.

According to the Rhodium Group, Chinese investment has totaled to around $18.4 billion during the first half of 2015. That is about $53 per capita. At least some of that amount should enter the US from various countries if China has not been the one buying all the real estate. According to the Chinese economic expert this investment is helping in the periphery and not in the center of the economy. This means it does not have the power to influence the country’s economy. Hence, it was just a fluke at that time and it also does not hold much importance now because USA very much has a good hold on its economy.

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