CHINA’S direct investment in the United States is expected to grow fast in 2017, but political realties pose major downside risk to it, according to a research report by a U.S. consulting firm.

    Chinese companies invested a record of US$45.6 billion in the United States in 2016, tripling the amount in 2015, said Rhodium Group in its recent report.

    Although merger and acquisition remain the primary Chinese investment in the United States, greenfield investment is continuing fast expansion, the report said.

    The rising Chinese investment to certain degree reflected China’s economic restructuring. “In contrast to the dominance of fossil fuel investments before 2013, more than 90 percent of Chinese foreign direct investment in 2016 was targeting U.S. services and advanced manufacturing sectors,” it said.

    Real estate and hospitality, information and communications technology, entertainment, and financial services continued to attract the interest of Chinese investors.

    The report expected Chinese investment in the United States to continue experiencing growth in 2017, because Chinese companies are keen to upgrade technology and build out brands and local consumer presence.

    Other factors, such as stable U.S. economic outlook and the appreciation of U.S. dollar, also played a role in boosting Chinese investment. However, the report warned that political realties are likely to pose a major downside risk to the Chinese investment.

    “Chinese investors also face greater uncertainty and political deal risk in the United States in the aftermath of the presidential election,” said the report.

    President-elect Donald Trump’s cabinet appointments suggest a more confrontational approach to trade and investment policy toward China, it said.

    In addition, China is tightening administrative controls on certain types of transactions amid rising capital outflow pressure, which could also pose uncertainty for the outlook of the Chinese investment in the United States, the report added.(Xinhua)