China now has the second largest economy in the world, second only to ours. What kinds of impact is this having on our economy? N.C. State University economist Mike Walden answers.
“Well, one impact it’s having … – and in fact on the world economy – is that China is a major player in world investing. Now, I think many people have heard about the fact that China has been a big buyer of financial investments, particularly U.S. treasury bonds, and therefore they are helping to fund, if you will, U.S. government’s deficit. But perhaps less well-known is that China has gone into investing in terms of buying companies and buying into companies. In fact, in the last 10 years there have been almost 600 purchases or investments in U.S. companies by China. And this has occurred in industries like autos and electronics and chemicals and healthcare.
“Now, in fact, the government breaks the 600 purchases down by the state, and there have been 34 side purchases, or deals, here in North Carolina. And in fact we’re in the second tier of states in terms of total value of those purchases. Now the upside here of course is that if you have anyone investing, in this case China, in companies in the U.S., this is going to provide funding for those companies in terms of their operations and is going to provide jobs. And many analysts think that this kind of investment track record by China is likely to continue.”
Category: Economic Perspective