Foreign direct investment (FDI) from the Asia–Pacific in the United States plays an important and growing role in the U.S. economy. This paper explores the role of FDI from Asian–Pacific countries, analyzes recent trends, forecasts long-term prospects, and identifies new opportunities for the U.S. economy.

The U.S. Bureau of Economic Analysis (BEA) defines foreign direct investment as “ownership or control, directly or indirectly, by one foreign person, or entity, of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise.” FDI is generally divided into two categories: (a) greenfield investment and (b) mergers and acquisitions. Greenfield investment is the creation of new enterprises and the development or expansion of production facilities, whereas mergers and acquisitions involve the purchase of an existing enterprise.

The U.S. Department of State designates 44 countries and geographic areas within East Asia and the Pacific, and South and Central Asia.2 However, many of those economies have negligible FDI flows into the United States. This paper will focus on the 10 countries and geographic areas highlighted by the BEA as having a large FDI presence in the United States:3 Australia, China, Hong Kong, India, Japan, Malaysia, New Zealand, Singapore, South Korea, and Taiwan. ...

CONCLUSION
Asian–Pacific FDI plays a critical role in the U.S. economy. Asian–Pacific companies employ thousands of American workers in the United States and contribute to domestic economic growth.

While many Asian–Pacific firms open operations in the United States to expand within the U.S. market, factors such as labor productivity, innovation, and infrastructure also play a role. The United States is home to many existing Asian–Pacific investments abroad, and this trend is likely to continue in the long term.

Moreover, as large Asian–Pacific economies such as China and India continue to develop and globalize, their FDI flows to the United States are expected to significantly increase. As this occurs, the United States is prepared at the local, state, and national levels to welcome and facilitate these job-creating capital flows into the economy.

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This report was compiled by the Invest in America program of the U.S. Department of Commerce, and represents the joint efforts of the following contributors: Aaron Brickman, Neil Gibson, Jennifer Derstine, and Addilyn Chams-Eddine. It incorporates data that were available as of July 2009.

Invest in America is the primary U.S. government mechanism to manage foreign direct investment promotion. Its efforts are focused on outreach to foreign governments and investors, support for state governments’ investment promotion efforts, and addressing business climate concerns by serving as ombudsman in Washington for the international investment community. For more information on the program, visit its Web site at www.investamerica.gov.

The International Trade Administration has as its mission the creation of economic opportunity for U.S. workers and firms by promoting international trade, opening foreign markets, ensuring compliance with trade laws and agreements, and supporting U.S. commercial interests at home and abroad.

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