China's reach: The Asian giant finds the West a good investment

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It is normal for Americans to be concerned about what China is doing with its money, acquired through a very favorable balance of trade and an economic growth rate of 8 percent or more.

One obvious use of these funds is China's purchase through mergers, acquisitions and increased participation in foreign entities. A Hong Kong-based investment fund, A Capital, made a study of China's activities and released the results Tuesday. The private equity firm, which counts the Chinese government among its investors, reported that China invested $77.2 billion overseas last year, an increase of 14 percent over 2011. A third of its 2012 acquisitions were made in Europe.

This is natural since Europe is going through some hard times financially and some of its firms are struggling, in need of money and not as creditworthy as they would normally be. This could be seen as the Chinese picking over the bones of a depressed Europe or, more positively, as putting money into European enterprises and creating jobs in the process.

As for the United States, it attracted only $5.4 billion of China's 2012 offshore investments, an undisturbing 7 percent of the total. Its biggest American acquisition was AMC Entertainment at $2.6 billion, which is little cause for concern in terms of China trying to "buy" America.

In extending its reach around the world, China continued to acquire raw material sources as well as service providers. Alarm at its increasing activities in Africa should be assuaged to a degree by the fact that only 9 percent of its overseas acquisitions were there, although the scale is important in weak African economies.

The most important fact, apart from China's concentration on a faltering Europe, is that China's overseas investments were gradual, to make the integration of new acquisitions easier and not to create panic for people in the countries concerned. As proof, the United Kingdom scarcely blinked last year when the Chinese put $726 million into Heathrow Airport.

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