Acting as special representatives of Chinese President Xi Jinping, Vice Premier Wang Yang (3rd L) and State Councilor Yang Jiechi (4th L) arrive in Washington, the United States, for the fifth China-U.S. Strategic and Economic Dialogue (S&ED), on July 9, 2013. [Xinhua/Wang Lei]

The fifth Sino-U.S. Strategic and Economic Dialogue (S&ED) is currently in session in Washington, DC and because it is the first such dialogue under the Xi and the Obama administrations, public expectation is high for a new type of big power relationship. Both traditional strategic issues, such as regional cooperation and global governance, along with economic issues – especially investment treaties – will become focal points during future S&ED meetings.

Since the late 1970s, foreign direct investment (FDI) has been a driving force behind China's opening economy. The rapid growth and increasing attractiveness of FDI has contributed positively to China's economic development in areas such as job creation and capital market development. During the past 30 years, China's economy could be characterized by FDI-inflow growth; the next wave might be an increasing Chinese FDI outflow to the U.S.

In recent years, China's rapidly increasing outward foreign direct investment (OFDI) has caused economic and security concerns in the United States. It is interesting to see that state governments such as California see Chinese OFDI as a great resource for job creation and economic growth; but the federal government and U.S. Congress are deeply concerned about the Chinese acquisition of U.S. firms. The Committee on Foreign Investment in the United States (CFIUS) expressed deep reservations about Huawei's acquisition of 3COM and 3Leaf because of national security implications.

Despite these concerns, China is not among the top tier of FDI investors in the U.S. According to analysis by the Congressional Research Service, the United Kingdom, Japan, the Netherlands, Germany, Switzerland, Canada, France and Luxembourg are the top foreign investors in the U.S. It is clear that Chinese acquisitions have been politicized to a large extent.