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China Investment Monitor

The China Investment Monitor (CIM) is a dataset that aims at providing a comprehensive picture of Chinese direct investment transactions in the United States. It currently covers the period from 2000 to the present. The data is updated on a quarterly basis and made available to the public in aggregate form, together with commentary on recent patterns, specific transactions, and policy developments.

Chinese FDI in the United States has grown rapidly over the past decade, yet there is a lack of reliable, real-time data sources to track this trend. Official data often exhibit a 1-2 year time lag and do not capture major trends, due to problems such as significant round tripping and trans-shipping of investments.

The goal of the CIM database is to offer an alternative perspective on Chinese direct investment in the US by providing an accurate and real-time assessment of trends to policy leaders, executives, and the general public in both China and the US, leading to better policymaking and understanding of opportunities and risks. The data are compiled from a transactional approach which relies on collection and aggregation of data based on individual transactions, including acquisitions, greenfield projects, and expansions. The database provides an aggregated headline figure as well as various metrics of interest.

The CIM database tracks FDI transactions by ultimately Mainland Chinese–owned firms in the United States. In accordance with common international standards, FDI transactions are defined as greenfield projects or acquisitions of stakes in existing companies that exceed 10% of voting shares. Expansions of existing facilities and joint ventures where Mainland Chinese–ownership equals or exceeds 10% are also recorded.

Portfolio investment transactions (debt or equity stakes of less than 10%) are not included, which accounts for some differences between the CIM database and other sources. The CIM only counts investments in physical assets in the US. In other words, reverse mergers and Chinese firms listing their assets in US markets are not recorded.

Only completed transactions are recorded, while pending and promised transactions are excluded. Completed transactions refer to acquisitions that have been closed, and greenfield and expansion projects that have commenced. Large, multi-year greenfield projects over $100 million are recorded incrementally. In other words, only the portion actually invested during a specific quarter is recorded.

As there are hundreds or even thousands of small-scale FDI transactions every year that are impossible to follow, the minimum value for individual deals included in the database is $500,000.

US-China FDI Project

The US-China FDI Project is a multi-year research initiative that clarifies trends and patterns in FDI (foreign direct investment) flows between the world’s two largest economies. Rhodium and the National Committee on U.S.-China Relations lead the effort, in partnership with the American Chamber of Commerce in Shanghai and the China General Chamber of Commerce — U.S.A.

American companies have been active in the Chinese economy throughout the post-1979 reform period, investing hundreds of billions of dollars. In the past decade, Chinese investors have begun to expand their US presence as well, turning the FDI relationship into a two-way street with multi-billion dollar flows every year. This change has important economic and political implications, and has turned FDI into a first-order priority in the bilateral relationship.

Debate about the benefits and risks related to foreign investment is long-standing, and a copious body of literature exists on this subject. Many of those arguments are now resurfacing in the context of US-China FDI relations, including potential national security risks from foreign ownership, the role of reciprocity in investment market access, and the impact of FDI on innovation and long-term competitiveness. Much of the debate at the moment is predicated on claims about the pattern of investment that turn out to be untethered to any data.

It is essential that our discourse about FDI—to the greatest extent possible—be data-driven. However, current FDI statistics of both the US and Chinese governments are compiled with the primary goal of analyzing balance of payments-related questions; they are subject to significant distortions due to tax optimization and other shorter-term considerations; they have long delays and many gaps; and they do not offer the granularity necessary to analyze many policy-relevant questions. This project sets out to create greater transparency on US-China direct investment flows to facilitate a fact-based and more productive policy debate.