Conventional economic theory states that rich countries invest in poor countries, where development opportunities are greater and prices are lower. And in fact, in recent years, large flows of capital have gone from Western countries to emerging ones. It is true that anomalous flows in the opposite direction went, for example, from China to the USA: America was running a large current deficit, and this was financed by recycling the Chinese savings surplus into American securities, mainly T-Bonds or para-public securities. But it was not a question of direct investments (in productive projects) envisaged by traditional theory but of financial investments.
However, all of that is changing. Poor American growth invites both the US and China to step up direct investment in the United States. A Forum of American and Chinese investors, sponsored by the governments of the two countries – the world's first and second largest economies – took place in Jangsu province, and a stunning statement by US Treasury Undersecretary Marisa Lago – “We hope that Chinese investments in May America revitalize the American economy” sealed this beginning of 'CinUSA', a close interpenetration of the two economies. For now, the numbers are little more than symbolic: the investment contracts in both directions (but mainly from China to America) signed at the Forum totaled 3,4 billion dollars, and it is thought that Chinese investments in the US could double this year compared to 2011. More than 100 investors from America attended the Forum, including 20 mayors from small and large cities.
China and the United States are, for each of the two, the second largest trading partners. Their bilateral trade totals nearly $450 billion.
http://www.chinadaily.com.cn/china/2012-06/24/content_15519441.htm
