Friday, June 24, 2011

China Making Foreign Direct Investment?

At a recent economic development conference I attended, one person told me that West Lafayette, Indiana had seen capital investment from at least one Chinese company there.

The person saying this didn't say the company name, but stated it with credibility nonetheless.

The person added that nervousness in all of China about their future is making the U.S. a "hedge" location for such firms.  Makes sense.

Also, it is becoming a bit of a status symbol for a Chinese company to invest in the United States.  Makes sense too.

The companies also tend to like being closer to their U.S. suppliers.  Again, makes sense to me.

Will we see more of it? 

If this anecodtal story is an indicator, and I hopeful it is, then the answer is, "Yes."

Go back thirty years, when Japan was beginning to notice the shrinking of their working-age popultion, these same things could have been said of Japanese firms.  Japanese foreign direct investment in the U.S. is strong and has been for some time now.

Given the same issue of production age population shortages triggering inflation, China may be on the same track.

No comments:

Post a Comment