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Home Publications Blogs Beat the Press China's Purchase of U.S. Companies Does not Create Jobs in the United States

China's Purchase of U.S. Companies Does not Create Jobs in the United States

Wednesday, 19 January 2011 05:40

The Washington Post had a front page article touting the growth of investment by Chinese firms in the United States as a way of creating jobs. In fact, as the chart accompanying the article shows, the vast majority of the investment involves buying up existing firms. In most cases, this will not create any jobs.

The amount of new investment has averaged less than $1 billion a year. This is less than 0.5 percent of the U.S. trade deficit with China and not the sort of economic development that would ordinarily merit a front page article.

Comments (4)Add Comment
Chinese Freedom Overcomes Regulation and Uncertainty in USA
written by izzatzo, January 19, 2011 7:56
From the WaPo article, this quote:
But since 2009, Chinese investment in the United States has exploded - jumping about 150 percent to almost $12 billion in total, according to new figures from Rhodium Group, a New York-based consultancy. Today, Chinese firms employ at least 10,000 Americans.

After using its export expertise to skim the cream off the USA housing bubble it helped pump up, China moved in to cross the border and buy up the shattered ruins of USA auto parts companies at dirt cheap prices after the bubble burst.

When asked how this could happen, MSM explained that Teabagging USAers believe anything cloaked in freedom ... free choice, free trade, free markets, free, free, free.

The same Chinese Freedom that created the housing boom from the outside is now creating an auto parts boom from the inside and stupid liberals need to lead, follow or get out of the way of real job creation since the Chinese have managed to overcome regulatory uncertainty.
written by PeonInChief, January 19, 2011 8:07
Wow! A whole 10,000 workers! It's the Yellow Peril again! The only important point the article made was that this was a rerun of the "analysis" of Japanese investments in the US 30 years ago.
written by dunkelblau, January 19, 2011 10:31
Sounds like those existing firms were toast, so maybe "saving jobs" is more accurate than creating them. And perhaps more precisely that would be "temporarily", as in the long run any new jobs that are created are unlikely to be on this side of the pond.
This sort of thing does not create or destroy jobs
written by Floccina, January 20, 2011 4:26
This sort of thing does not create or destroy jobs. Trade issues are about efficiency not jobs.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.