What challenges to you see for the United States as China and other countries in

Question

What challenges to you see for the United States as China and other countries invest, and establish operations and ownerships in the United States??

From the role of international management, what future challenges/opportunities come to mind

Please see article below

Chinese direct investment in the U.S. economy is set to reach a new high this year due to a wave of deals announced in early 2016. But experts say the pace is already slowing as politicians and regulators increase their scrutiny of Chinese details.

Chinese companies are expected to invest $20 billion to $30 billion in the U.S. in 2016, mainly through mergers and acquisitions, compared with a record $15 billion last year and $11.9 billion in 2014, according to a report published Tuesday by research firm Rhodium Group and the National Committee on U.S.-China Relations, which promotes cooperation between Beijing and Washington.

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The investment is starting to attract attention, including among Washington regulators and politicians in the 2016 campaign season. Many voters are expressing deep mistrust of U.S. economic and trade ties as Donald Trump criticizes moves by China, Mexico and Japan.

Despite its ascent to the world’s second-biggest economy, China has so far invested little in the U.S. compared with the American investments coming from firms based in the U.K., Japanese and other advanced economies.

Only one-eighth of China’s $120 billion in outward investment last year went to the U.S., according to the report. Companies in North America trailed those in Europe and Asia as targets of Chinese acquisitions in 2015, Dealogic says. But the amount invested in the U.S. is growing rapidly as China plows less into commodity-rich developing countries as Beijing seeks to shift the economy toward technology, services and greater consumer spending.

“They’re scrambling to upgrade their technology, they’re scrambling to build household brands quickly,” said Thilo Hanemann, economist at the Rhodium Group. “We’re seeing a big shift in Chinese investment from the developing world and emerging markets to high-income markets including the U.S., Europe and Australia.”

‘They’re scrambling to upgrade their technology, they’re scrambling to build household brands quickly.’

—Thilo Hanemann, economist at the Rhodium Group

The first quarter saw Chinese bids for U.S. companies at a dizzying pace, in part an effort to diversify abroad after the country’s market turmoil last August and concerns about a shift in the dollar-yuan exchange rate. Now, some U.S. acquisition targets are more worried about the ability of Chinese companies—many controlled by the state—to get the green light for foreign deals and obtain financing, Mr. Hanemann said.

Without major new deals—such as Anbang Insurance Group Co.’s unsuccessful $13.2 billion bid for Starwood Hotels & Resorts Worldwide Inc.—the pace of acquisitions and “greenfield” investments could ease off for the rest of the year, resulting in a “conservative” estimate of $20 billion to $30 billion for 2016, Mr. Hanemann said.

But the total could be much higher if giant U.S. companies get promising bids in coming months. In Switzerland, China National Chemical Corp.’s $43 billion bid for Swiss pesticide and seed company Syngenta AG helped boost China’s bids for European assets to $61 billion this year, according to Dealogic.

Also weighing on the deals is stepped-up attention from regulators, including the Committee on Foreign Investment in the U.S., which evaluates acquisitions of American business on national-security grounds. Washington lawmakers have pressed U.S. officials to scrutinize deals involving financial infrastructure, such as the Chicago Stock Exchange, and strategic semiconductor technology.

“It certainly could have an impact on the psychology of Chinese buyers—they have a perception that it could be difficult to do a deal in an election year,” Mr. Hanemann said.

Some lawmakers are crying foul, protesting that U.S. firms can’t invest easily in many sectors of China’s economy, while the U.S. market is wide open for their Chinese competitors, or nearly so. Efforts to negotiate a bilateral investment treaty between the two countries have stalled as Beijing has sought to rope off numerous industries.

Still, Chinese-affiliated companies extend across 362 out of 435 congressional districts, according to the report. New York has benefited from Chinese deals related to tourism and financial services, while the Southeast is seeing investments from petrochemicals to manufacturing.

Chicago ranked third on the report’s list of congressional districts in terms of Chinese direct investment in the last 15 years, and the Chicago Stock Exchange triggered alarm bells in Washington this year after it agreed to be bought by a Chinese firm.

“We don’t necessarily want to be invested in by trading partners and have to be overly concerned that they might be getting a better deal from us that what we’re getting from them,” said Rep. Danny Davis (D., Ill.) whose district includes the exchange. Mr. Davis said he has concerns about the U.S. trade deficit and alleged Chinese currency manipulation but understands the deal for his hometown stock exchange, which handles only a fraction of daily U.S. equity trades, is part of living in a global economy.

Write to William Mauldin at william.mauldin@wsj.com

Explanation / Answer

In recent years, Chinese investments picked up in western markets especially US and Europe. The biggest weakness of Chinese economy is that they are unable to create global brands like Google, Microsoft, and facebook even though they are the second largest economy and having highest foreign currency reserves in the world. China is preparing itself to become a global power and trying to replace the USA through these aggressive acquisitions. The phase of acquisitions is going to increase in near future. Having ownership of these global brands very essential for leading economy like China. The US influence is going to reduce in the global economy because of ISIS threat and south china sea issues. New political leadership in US is going to focus more on domestic issues and try to engage less with global issues to address domestic issues such as security and job creation. If the job creation and Security are the main election issues, new leadership try to focus on above mentioned issues in near future. The internal focus diverts the attention of the USA in near future reduces its influence in global politics. This will give a chance to china to rise to the global level and try to position itself as a global player. China tries to impose unilateral opinions on global issues and we can see this in the case of the South China Sea and India’s entry into NSG is vetoed by China. But to fill this global leadership vacuum, China need to go a long way and may not even succeed at the end. In the meantime, US try to align with India to check China’s influence through defense cooperation and strategic tie-ups. During same time China tries to align with countries which oppose the USA such middle east and north African countries, China tries to acquire global US brands in technology areas to show their dominance in digital space. China tries to fund major infrastructure projects across the globe especially in Asia and Africa to strengthen its economy.

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