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China’s Investment In U.S. on the Rise

Washington — High-tech batteries. Advanced wind turbines. Sensitive telecommunications gear. Last year saw a spike in concern over Chinese foreign investment in the United States, as election year politics, economic anxiety and a record level of dealmaking all aligned.

According to Thilo Hanemann, a Rhodium Group analyst who follows Chinese foreign direct investment, the United States should become accustomed to the phenomenon. The pace and prominence of Chinese dealmaking is only going to rise in coming years, he argues, as China loosens the rules governing its financial sector, looks to diversify uses of its ample foreign currency earnings, and bids for new technologies and skills.

“China is now the second largest economy in the world. They are going to surpass the U.S. And they are only starting their foreign direct investment,” Hanemann said. “There are billions and billions of dollars to come.”

The Obama administration last week approved the acquisition of bankrupt Massachusetts battery maker A123 by a Chinese firm, a deal opposed by some members of Congress because of federal grants the company had received and because of its work on defense contracts.

Despite the controversy over such deals as the purchase of A123 — or the rejected acquisition of an Oregon wind farm close to a U.S. military facility — Chinese ownership of U.S. companies and property remains small compared to the amounts owned by firms or residents from elsewhere, and the majority of deals move ahead with little public notice.

Chinese companies invested $6.5 billion in the United States last year. That’s a record and a 17 percent increase over the prior year, according to data assembled by the Rhodium Group.

But it’s also about the same as Spain, a country whose multinationals have been seeking markets outside the beleagured euro zone.