Post ReplyDAVOS, Switzerland—Key Chinese companies are considering stepped-up investment in the U.S., particularly in infrastructure, and the White House is encouraging them to move ahead.
In an interview with WSJ's Rebecca Blumenstein, Liu Chuanzhi, chairman of Lenovo Group, the world's fourth-largest computer company by sales, says he expects to see more Chinese investment in the United States.
The prospects for fresh Chinese investment were discussed at a meeting last week between Chinese business leaders and the American and Chinese presidents during a state visit to Washington.
One of the participants, Liu Chuanzhi, chairman of Chinese computer company Lenovo Group Ltd., said in an interview Wednesday at the World Economic Forum at Davos that he was among those seeking to deepen his U.S. investment.
At the meeting, President Barack Obama and the head of China's Investment Corp., the country's $300 billion sovereign-wealth fund, talked about the Chinese investing in infrastructure projects in the U.S.
"The United States is open for investment and would welcome it," Mr. Obama told the group, which included four Chinese CEOs, 14 American CEOs and Chinese President Hu Jintao.
Mr. Liu on Wednesday said Lou Jiwei, the chairman of CIC, had told Mr. Obama that he "was interested in exploring the opportunity."
"If it's complementary and good for both sides, why not?" said Mr. Liu, one of China's most respected business leaders.
The talk of U.S. investments comes as waves of capital are going in the opposite direction—from developed countries like the U.S. into emerging economies like China—as companies chase higher growth rates. But Mr. Liu said Chinese companies continue to see opportunities to invest in the U.S., because it addresses Chinese companies' need to expand abroad while furthering the U.S. goal of keeping jobs.
"These Chinese companies, when they go abroad, do so out of business necessity," said Mr. Liu, who co-founded Lenovo, the world's fourth-largest computer company by sales, and is also chairman of its parent, Legend Holdings Ltd. "I call this the evolution of Chinese business."
From the U.S. perspective, foreign investment generally translates into jobs. White House officials see potential for foreign companies to build manufacturing plants in the U.S., despite higher U.S. labor costs, to bring goods closer to consumers in the world's largest economy.
"For China to invest in the U.S., in much the same way the Japanese did in the '90s and beyond, to create jobs and manufacture products here, could be quite a constructive contribution to our growth and to better relations between our two countries," a senior White House official said. "We see foreign investment as a key part of our effort to create jobs and growth."
The interest in infrastructure, which the Chinese have brought up in earlier meetings, also fits into the White House push for more investment in roads, airports and other projects, a point Mr. Obama highlighted in Tuesday's State of the Union address.
European Pressphoto Agency
Lenovo's Liu Chuanzhi speaks at the Asia Financial Forum in Hong Kong Jan. 17.
The Obama administration is aware of the dicey politics that could surround Chinese ownership of key infrastructure projects, such as an airport or a toll road. U.S. officials have encouraged the Chinese to be thoughtful about how they approach this and consider taking minority, passive stakes in larger projects.
During their visit last week, Messrs. Obama and Hu both spoke warmly of Chinese investment in the U.S. at the start of the meeting with the business executives.
"We've got some Chinese business leaders here, who I know are already doing business in the United States, making investments in the United States, engaging in joint ventures in the United States, and helping grow the economy here in the United States," Mr. Obama said. "I know they're interested in finding ways that they can expand their activities in the United States."
Mr. Hu voiced a similar sentiment. "I also have a message to Chinese entrepreneurs. That is, the Chinese government will, as it has always done, support you in making investments and doing business here in the United States," he said.
A CIC spokeswoman declined to comment on Mr. Liu's remarks last week with Mr. Obama. But CIC has made infrastructure investments before. In March, it finalized a deal to pay $1.58 billion for a 15% stake in AES Corp., a major U.S. power generation and distribution company.
Last fall, a CIC official said the fund would be interested in financing U.S. infrastructure projects as a passive investor, not as a majority owner.
"We are advocating that the U.S. government start a program to invest a massive amount of equity, in the form of public and private-equity partnership, in U.S. infrastructure," Zhou Yuan, head of asset allocation at CIC, said at a conference in New York in October.
He said infrastructure projects, such as high-voltage transmission lines, will help create more jobs in the U.S. than the Federal Reserve's quantitative-easing policy.
Lenovo is one of the most active Chinese investors in the U.S., with some 2,000 employees in the country, according to the company. It set a milestone for Chinese investment in the U.S. with its 2005 purchase of International Business Machines Corp.'s PC business.
And Mr. Liu said Legend was looking at a U.S. medical-equipment company and purchases in the hospitality sector, to accommodate waves of Chinese tourists.
Legend Holdings is an investment conglomerate partly owned by the Chinese government. It has property, private-equity and other holdings in addition to its controlling stake in Lenovo, of which it owns more than 40%.
In the PC business, Mr. Liu said he was optimistic about Lenovo's prospects of lifting market share in emerging markets and the U.S.
In the U.S., Lenovo is the fastest-growing vendor, with a market share of 5.6% in the third quarter, according toresearch firm International Data Corp.