Chinese investing in U.S. business to meet demand for U.S. products
(CBS News) Economists say a number of factors could keep the economic recovery going in 2013. But here's one factor you might not expect: investors from China are putting billions into American businesses to meet the increasing Chinese demand for U.S. products.
Scott Meadows runs Silenus Vintners in California's Napa Valley. The bottles all sport an American bald eagle. Why? He was directed by the vineyard's owners in China to add the American nationalistic symbol.
In 2010, the vineyard was up for sale. Chinese investors bought it, and now 90 percent of the wine made there -- 9,000 cases -- is shipped to China.
So what does a Chinese company want with a vineyard in Napa Valley? Meadows said, "There's a big demand in China for luxury goods, for goods that are scarce, and for goods that are well made. So rather than buying Chinese-made products and sending our money over there, they're buying American-made products and sending the money back over here. And the jobs stay here."
Chinese firms, flush with cash, have invested $16.4 billion in the U.S. from 2000 to 2011, with $1.3 billion in California companies, and a record $560 million in just the past year, according to a report by The Asia Society/Rhodium Group.
The Chinese are also boosting the Golden State's housing recovery. The Asia Society/Rhodium Group report notes the Chinese have bought one out of every 10 homes sold in the past year.
Di Meng is a student at the University of Southern California. His parents bought him a nearly $1 million condo at the Ritz Carlton. They thought renting a dorm room was a waste of money.
Meng said, "My parents decided to buy me a house as an investment outside China. ... Compared to the high-end housing in Beijing, this is not that expensive for them."
A housing complex in Irvine, Calif., is being built for Chinese buyers with separate wok cooking rooms, no unlucky fours in addresses, and multiple entrances for multi-generational living.
Joan Marcus-Colvin, a realtor of the housing complex called Lambert Ranch, said, "We have not seen this kind of activity in the last four years, so we're very, very happy."
In Napa, Meadows says Chinese wealth is an opportunity, not a threat for American business. "America is known for quality," he said, "so the Chinese look at American-made products, and foreign-made products in general, as things they can trust."
After all, that eagle is on the bottle because what so many Chinese want is something made in the USA.
For Ben Tracy's full report, watch the video in the player above.
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