Why Investment from China Is Encouraging for The US Economy

Foreign trade and investment are vital to keeping American businesses thriving, and if you are in business yourself, you will know how important overseas markets can be. In recent times, China has become a very important partner for imports and for supplying goods to US businesses for retail. However, the relationship is beginning to be more of a two-way street as China is providing more investment in America, as well as becoming a key consumer for American goods.

Promoting the US to Chinese Investors

Wealthy investors who want to start businesses in America have been encouraged to invest in the USA and create jobs for communities here by a special immigration program called the EB5 visa. A recent EB5 extension (find out more about from Hirson Immigration) has seen this scheme extended until the end of 2017. 

The scheme works by offering an investor and their family a two-year green card if they invest $500,000 or more and create a minimum of ten new jobs. While the visa only lasts for two years, it also sets investors on a path to citizenship if they qualify for this later, so it is an appealing prospect for investors who would like to run businesses long term in the US. While the scheme is open to people from lots of countries, by far the biggest uptake has been from Chinese investors.

The Growth of the Chinese Middle Class

As well as bringing money into our economy through investment and job creation, the growing middle class in China is also becoming a significant market for a lot of American businesses. The middle class in China has grown rapidly as the nation has moved away from traditional communism, and now there is a market of around 300 million people who fall into this category. They have significant disposable income and, according to Jack Ma of Alibaba, the biggest online retail platform in China, a taste for US products, which they feel are high quality and luxurious. 

Alibaba and US SMEs

With this audience in mind, Jack Ma has been working with President Trump to create connections that allow US businesses, mostly smaller ‘mom and pop’ type producers and retailers, to sell to Chinese customers via his platform. This creates a lot of opportunities and facilitates marketing and selling to people in China who are interested in buying things from US companies. Ma has also pledged to create one million jobs in the USA, something which President Trump found very appealing although some analysts believe this claim may have been overblown. Ma is one of the richest people in China and has been fostering a good working relationship with the president. He certainly has the potential to be a useful ally in creating more opportunities for American business owners to enter the Chinese market.

The burgeoning middle class in China and their interest in investing in America could have very positive long-term effects on our economy and businesses.