Where's The Money: Chinese Investments in U.S.

Chinese investors make major moves into well-known U.S. companies.

ByABC News
June 7, 2013, 10:29 AM

June 7, 2013 -- intro: In an unprecedented California summit this weekend, President Barack Obama and Chinese President Xi Jinping will discuss a wide range of topics. With China's economy expanding at an exponential rate, strategic Chinese investments in U.S. companies are sure to be discussed when the two global powers meet.

A quick glance at the list reveals that Chinese companies have an implicit interest in the global energy sector, as well as slew of other major industries. The trend is not lost on the U.S. Treasury Department's Committee on Foreign Investments.

In a December 2012 report, the committee said that it "judges with moderate confidence that there is likely a coordinated strategy among one or more foreign governments or companies to acquire U.S. companies involved in research, development, or production of critical technologies for which the United States is a leading producer."

While not singling China out, the report sheds light on a concern of the Obama administration. Here's the short list of Chinese investments in U.S. companies:

quicklist:1title:Smithfield Foodstext: In what would become the largest acquisition of a U.S. company by a Chinese company, the proposed takeover of Smithfield Foods Inc. by Shuanghui International Holdings Ltd. is turning heads.

Smithfield agreed to a $4.72 billion deal, but it still faces a review by federal regulators and a vote to gain Smithfield shareholder approval.

The deal is raising eyebrows for several reasons: the quickening globalization of American brands, concerns over regulatory discrepancies between Chinese and American standards and concerns over China's lackluster environmental record.

Smithfield executives have assured critics that the acquisition is about exporting Smithfield's products to China, not importing Chinese meats to America.

"I know how people react — that we are selling out to the Chinese," said C. Larry Pope, chief executive of Smithfield. "This is not selling out to the Chinese. This is Smithfield being part of a global organization. There will be no impact on how we do business in America and around the world. This is about America exporting."

With several reports of Chinese companies shortcutting environmental regulations, and Smithfield having gotten in environmental trouble of its own, it remains to be seen how the deal will affect environmental standards throughout both companies.

quicklist:2title:IBM PC Unit Lenovo Laptopstext:In June of 2005, the Chinese personal computing giant Lenovo completed its takeover of IBM's personal computing division, a $1.75 billion deal that quadrupled Lenovo's annual revenue.

The acquisition made Hong Kong-owned Lenovo the third-largest PC vendor on the planet. Before the sale, few of Lenovo's products were sold outside China.

Since then, its ThinkPad brand of computers has grown steadily in the United States, capturing 40 percent of the U.S. retail market of computers that cost at least $900 and run Windows 8, according to the Wall Street Journal.

"This is a normal situation," said Yang Yuanquing, Lenovo's chief executive, to the Wall Street Journal, referring to the U.S. wariness of Chinese technology firms. "In every country, they are more comfortable with working with a local company."

Expanding into America, Lenovo has headquartered itself in North Carolina and opened a manufacturing plant there.