Chinese funds inflow creates jobs in US, but concerns also

Chinese companies established in the US have definitely created jobs for Americans, but latest adverse conditions in the dragon country's economy have become a cause of concerns for the world's largest economy.

China is being accused of spying activity at the industry and at government level as well. The Chinese money comes with increased concerns, observe market analysts.

The latest Yuan devaluation has become part of the US election debate as Republicans have already started criticizing China for its manipulative measures in currency devaluation that will impact American workers.

The investment made by Chinese companies in the US is estimated to be $12 billion in 2014 alone and it was nothing compared to early 2000. This made China as a fastest growing nation in the list of foreign direct investment (FDI) of the US.

By investing huge amounts, Chinese companies have established factories and other business operations in the US. Over 80,000 Americans are working in Chinese-built US factories, according to the data from Rhodium Group, a New York-based firm that tracks cross-border investment.

Chinese President Xi Jinping's US visit is scheduled for late September this year. Jinpin's visit is expected to influence economic bilateral issues profoundly.

Chinese companies are suffering from labor supply shortage, surplus capacities, increasing wages, etc. Many Chinese companies that have built factories in remote areas in the US are crossing the borders to close the shop, observe some analysts.

30 years ago, US companies were preferred to begin business operations in China as the dragon country was offering more tax breaks and other incentives. Now, the situation is different. It's reverse migration as Chinese companies started setting up business operations and factories in the US hinterland particularly from 2000 onwards.

Few months ago much before the latest crisis erupted, the US Business Council said that foreign investment from China is not sufficient to rebalance the bilateral economic relations. The US registered trade deficit with China in 2014 and it's more likely to continue for this year also.

China has not reduced purchases of US treasury bills. Because most of the emerging economies prefer to park their funds in US treasury bills as a safe haven. China has not afforded a reciprocal level of market access to US investors in manufacturing, agriculture, automotive and services sectors.

On the other hand, US companies are adjusting to slow growth rate in the Chinese economy. The Wall Street companies are used to double-digit growth rate of Chinese economy all these years. Now, it's negative news that China is growing at below seven percent or at five percent annually. But, it's growing, says Wall Street analysts.

Views of portfolio investors, multi-national companies (MNCs) and owners of Chinese-built US factories differ widely depending upon their own strategies, requirements, and expectations, feel analysts.