Reasons Why US should allow Chinese Investments

1.Much needed employment creation for US

With unemployment hovering at an uncomfortable 9.5% and an economy facing lacklustre growth, Chinese investments have the potential to create thousands of new jobs. Take for instance China’s Anshan Iron and Steel Group Corp. The company wants to buy a small stake in a $175 million rebar facility under construction by a U.S. start-up called, Steel Development Co. in Armory, Mississippi.

But a group of 50 U.S. lawmakers have called for an investigation into the deal, saying that it threatened U.S. jobs and national security. Steel Development Co. has defended the Chinese investment and pointed that it could create about 1,000 construction jobs and more than 200 permanent manufacturing jobs once the facility is done.

2. Chinese companies are struggling to do business in US

While Chinese firms see the U.S. as an attractive place to do business, executives also think it’s an incredibly risky venture.

Chinese companies that decide to move or expand into the American marketplace know that the business environment is more mature but also highly legalistic, with stacks more regulation on everything from labor regulations to workplace safety.

Adjusting to a new regulatory environment is hard enough. Expecting Chinese companies to deal with elected officials making a political case out their deal making creates an unnecessary barrier to doing business.

Indeed, China’s marketplace has all sorts of quirks that give the country an unfair advantage over other economies, including an artificially low renminbi. Evening that out, the political storm that erupts when a Chinese company wants to invest in the U.S. is almost comparable to an unofficial tariff.

3) Would end trade tussle and improve diplomatic relations between US and China

The interest that Chinese companies have shown in investing money in America could suddenly give officials on Capitol Hill more leverage when it comes to negotiating trade issues and economic policies with its East Asian neighbor, China expert Dan Rosen told Fortune in May.

The U.S. already depends a lot on China for everything from clothing to electronics. Even amid the world’s economic uncertainties, exports from China to the U.S. in July rose 38.1% to $145.5 billion, widening the trade surplus with the U.S. by 46% to $28.7 billion. And though China has cut its holdings on U.S. Treasury notes and bonds recently, it’s still America’s largest creditor next to Japan. As of July, China held 10% of the $8.18 trillion in publicly traded U.S. debt.

At the same time, China has huge stakes in the U.S., as it overwhelmingly depends on U.S. demand to drive its export-led growth. Encouraging Chinese investment could only help America’s negotiating powers by giving China an even larger interest in the US economy. It might just give U.S. lawmakers that extra edge to smooth issues (from human rights to tariffs) between East and West.

4) US regulators will ultimately control Chinese companies in US

It’s pointless for U.S. lawmakers to make huge public stinks over national security concerns. While these are valid issues that need to be thoroughly addressed, they are mostly a sideshow. U.S. regulations will ultimately dictate how Chinese companies behave in our markets. And more importantly, they will decide whether these companies have the bona fides to operate in the U.S.