Investment Contrarians

China Moves Funds Out of the U.S.

By for Investment Contrarians | Jun 6, 2012

















Recent news that the Chinese Investment Corporation has announced that it will be moving some of its invested funds out of the U.S. and into emerging markets is a decision that sends an important signal about investor sentiment. This is an interesting move by China regarding its view for the future of the U.S. economy. The U.S. economy has obviously encountered significant setbacks over the last few years, but these are only the beginning of our problems if investor sentiment such as this takes hold. Once nations like China decide that the future is less bright when looking at the U.S. economy compared to other nations, that’s when we’ll have serious issues.

The sustainability of the U.S. economy is built on positive investor sentiment built with foreign investments, fresh money coming into the nation and continuing its growth path. Once we lose foreign investor sentiment to other nations, the U.S. economy will lose its edge. Attracting capital and people to join the U.S. economy in creating wealth is the foundation of American success. The U.S. economy has become the largest in the world because foreign capital and people have developed new technologies and innovations. Once investor sentiment shifts, the country that gets this new attention will also get the result, which is a much stronger economy.

The China Investment Corporation stated that part of the reason was increased scrutiny from regulators, as many are worried that the organization is backed by the Chinese government. While everyone should be aware of keeping our best companies within the U.S. economy, shutting the door to foreign investment is not the answer.

The sovereign wealth fund is looking at many other emerging nations that will benefit from the increased dollars from China. The U.S. economy, mired in its current financial difficulties, obviously cannot afford to be cut off from the money that’s been coming from China. This money is what creates greater funding for new technological innovation and, ultimately, more jobs. A shift in investor sentiment away from the U.S. economy is not in America’s best interest over the long term. These structural roadblocks need to be removed, and the U.S. economy needs to become the main place in the world for capital to flow into. Shifts in investor sentiment are serious, as once lost, it’s extremely difficult to get back.

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  • claretta hodges

    Thank you for articles which enlighten readers with well-presented truth. The difficulty of ferreting out pertinent financial information is exasperating. Articles such as this help me educate my 30-40 year old children who are busy working and keeping my grandchildren safe in this horrible mess.

  • Ken

    Like China I have been moving some of my funds out of the U.S. and into emerging markets.

    It does not take a Rocket Scientist to realize that ObamaCare, Dodd-Franks, other laws, a 16 Trillion Debt and more and more Regulation have soured investor sentiment towards the US.

  • John Donnelly

    The U.S. economy is financed to run with foreign investments, just like a small buisness is run and financed from a banks loan. However the American job wether from a domestic or oversees company here right in America is the and always will be the true cornerstone of our economy. Tax revenues in whole will always outweigh foreign investments in the longterm. It is more important to the growth and stabilization of our economy to keep our jobs here. Investments from emerging markets will invest in the country where the companies are located and developing and growing new innovations.

  • Jakester

    The above opinion of what made or makes the U.S. economy work is entirely a created work of deception and fraud. What made America big and bad was the advanced products it once produced that the rest of the world wanted to buy at a premium price and most of the world did so. We had the money to build cars, textiles, toys and food products that were second to none. We not used our own natural resources in building things for the rest of the world as well as ourselves — but, we set the standards.

    When cars started being sold at prices Americans could no longer afford without stretching their personal dollars and Levi's were no longer made in America by Americans — that's when the U.S. economy was sent down the sloppy hills of greed and arrogance. The U.S. economy was crashed by American greed and usually by American men.

    When the advent of greed sent American men to other countries to divide and conquer — the price to do that has cost American's their dignity and trust. The American man in his dazed arrogance in which he sold his children's futures down the toilet for a night on the world town — is never going to be recouped. America has got to be torn down and rebuilt with a new identity. Not one of murder and theft. Not one where our Presidents sit and lie to the people as it gets bombed. Not one where the guys at the Lodge take to buggering their young boys.

    America is sick and needs a new doctor and a strong dose of medicine to fix what ails it. Start with getting rid of the bankers who have robbed the world of it's dignity as a great place to be next to heaven. Banking is not a hard task. Starting a war is not a hard task.

    Lying, cheating and murdering without being caught are very hard tasks. That's why it makes governments look powerful. They do those things best. With the powers of the most wealthy persons in the world to feed a government to do their bidding — the wealthiest persons in the world are singularly responsible for the World Wars and the murders of the 100's of millions of bodies housing the spirits of those who came to this planet to enjoy it's abundance. Getting rid of vermin is the hardest one thing in the world to do — but, that is the ONLY thing that is ever going to fix the world now. It's either going to be them OR us.

    Choose your side is easy. You have no brains or intellect. You don't know what money is. You think gold and silver are — but, that's only because you were told that it is. You don't know how to make use of your natural resources. You don't know how to mine minerals and turn them into cars, houses and roads. You don't know how to make your own medicines. You don't even know how to boil your water to drink. You are an American. You are basically stupid. Unless you are shown what, when or where — you don't know.

    As long as Americans can't provide for themselves as in the days old — they don't have a snowball's chance in hell to getting over the impending fall of their country. The people that built America are dead and gone. What is left are are a bunch of arrogant party goers looking for a great night out on the town. I'm sorry for you.

  • ElConquestadore

    I totally agree. I've been preaching basically the same thing to my kids since they where old enough to understand. In the greedy rush to have it now, with no work on our part, we have outsourced and lost our opportunity to hold the title of economic giant. We have gone so far down the road that people can't even perform simple tasks that used to be automatic.

  • rbwfla

    One thing for sure about this It's not Obama's Fault and I'm not a Democrat! It's Obvious where the problem is.