How China is investing in America

China has billions of American dollars, and lately has been using some of that money to buy land and stocks.

By Kim Peterson Mar 4, 2010 1:17PM
china © Brand X/SuperStockAll those cheap made-in-China goods we buy from Wal-Mart (WMT) and other stores have given China billions of American dollars to play with.

Now, China is increasingly using that money to invest in America. It's buying up real estate across the country, and is upping its stakes in American companies like Coca-Cola (KO) and Johnson & Johnson (JNJ), reports the Los Angeles Times.

China is investing globally. Its direct investments overseas rose 6.5% last year to $43.3 billion, writes the Times' Don Lee. That could hit $60 billion this year.

So what's China buying?It's taking advantage of our troubled real estate market to get into land. But it's doing so through partners -- not in an overt way that some Americans might dislike.

In the last year, China has poured hundreds of millions of dollars into real-estate funds managed by Goldman Sachs (GS) and other companies, Lee writes.

"In the past year, the U.S. real estate market seemed to have hit bottom and signs of recovery were obvious," a researcher at the Ministry of Commerce in Beijing told the Times.

China has also bought shares of Apple (AAPL) and Visa (V), and last year spent $1.6 billion buying a 15.8% stake in power company AES Corp., Lee writes.

Hotels are a target as well. A state-owned hotel company in China recently formed a 50-50 joint venture with an American company to buy Interstate Hotels & Resorts, which manages 232 properties, the Times reports.

Chinese companies have learned that allying with partners tends to draw less attention, said Wenran Jiang, a China expert at the University of Alberta who has studied Chinese investments around the globe. When multiple parties are involved in a deal, he said, the Chinese buyer's stake gets diluted. "So you can't report that the Chinese are taking over."

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