About the China Footprint

At a time when trade wars and financial sanctions dominate headlines, the China Footprint highlights a different dimension of the US-China economic relationship: the rapid expansions and contractions of the various types of Chinese consumption and investment on US soil.

The activities captured represent discrete arenas of more tangible “face-to-face” economic engagement between the two countries. While some parts of the China Footprint—education and travel—are included in US “exports” to China, they involve Americans providing services to Chinese in the United States, not simply goods exports.

What unites these diverse categories—FDI, venture capital, home purchases, EB-5 investment, education, and travel—is that they bring the US-China relationship deep into the lives of American citizens, creating new opportunities as well as new frictions at the local level.

The footprint tracked here deliberately looks beyond the highly scrutinized bilateral trade relationship and instead draws on the best available sources to paint a composite picture of Chinese consumption and direct investment in the United States. This “footprint” is a proxy indicator of the depth of China’s economic ties with America.

Although the data presented here are already public, they are often described as isolated instances in which Chinese spending or investment is affecting a particular city or industry. The China Footprint seeks to reframe this narrative by illustrating the aggregate impact of these tangible economic ties.

The China Footprint has omitted some potential categories due to a lack of reliable data, such as the purchase of American financial and insurance products by Chinese nationals. While Chinese purchases of financial and insurance products have increased, the exact amount is unknown. Due to the liquid nature of these financial products, the majority of these purchases are made through third-party financial hubs, making an accurate accounting difficult.

Despite such omissions, the China Footprint both adds to and reframes our understanding of the evolving US-China economic relationship. National policy affects these activities, but they in turn affect the policy environment through the extent to which they do or do not bring Chinese institutions and citizens directly into contact with American cities and communities. The China Footprint aims to capture the ebb and flow of this process over time.

Data Sources and Methodology:

FDI
Data on Chinese FDI in the United States are from the US-China Investment Project.

Venture Capital
Data on the amount, sector, and takeaway numbers on Chinese VC in the United States are from the US-China Investment Project, where 2019 data is for 1H2019 only. Sector data is for all VC transactions in the United States that include Chinese investors from 2000 to 1H 2019, where sector categories are not mutually exclusive.

Data on the total value of VC deals with Chinese participation are from published Pitchbook figures, and can be found here, where 2019 data excludes 4Q2019.

Data on deal stage and the destination of Chinese investment in American tech companies are drawn from CB Insights, with the former data for 2010 to October 31, 2017 and the latter for 2012-2016.

Home Purchases
Data on home purchases are drawn from the National Association of Realtors: Copyright © 2019 “2019 Profile of International Activity in US Residential Real Estate.” National Association of Realtors. All rights reserved. Reprinted with permission. July 2019.

National Association of Realtors (NAR) data on Chinese home purchases exhibits a time lag of nine months, with data for “2019” covering April 2018 to March 2019. While this lag places home purchase data slightly out of sync with other categories, it remains the best and most up-to-date information available. NAR data on Chinese purchases includes buyers from mainland China, Taiwan, and Hong Kong. For the years 2010-2015, the data include some commercial real estate purchases, but later data includes only residential purchases.

EB-5 Investment
Data on the number of Chinese EB-5 visas are from the annual “Report of the Visa Office” issued by the Bureau of Consular Affairs in the US Department of State.

Estimates of the total amount of Chinese EB-5 investments from 2010-2016 come from an Associated Press report which combined State Department data on EB-5 visas with a multiplier for the average number of visas granted per investment. We used that multiplier with more recent State Department data to replicate these estimates for 2017-2019.

“Regional Centers” depicted in the heat map are corporations licensed by the United States Citizenship and Immigration Services to pool EB-5 investments for large-scale projects, with the latest reliable data used to construct this map coming from 2017.

Education
Data on education spending are from the “U.S. Travel and Tourism Balance of Trade” published by the National Travel and Tourism Office (NTTO) in the US Department of Commerce.

Since these data exclude spending on flights by Chinese nationals, to give a full picture of Chinese education spending, we consulted the NTTO’s “Market Profile: China”. Using this survey, we estimated the percentage of Passenger Air Transport receipts from Chinese students, then added this result to the baseline data on education spending to obtain our final numbers.

In addition, the NTTO has yet to publish the precise breakdown of total travel and tourism-related exports for 2019, so we estimated the proportion of total such exports attributable to education using the average proportion over the previous nine years.

Data on the number, location, and majors of Chinese students in American institutions of higher education are from the Open Doors 2019 report by the Institute for International Education, which reflects data from the 2018-2019 academic year.

Data on spending and arrivals include all students from mainland China entering the United States on an education-related visa (primary, secondary, tertiary, and vocational education). Arrivals is an imperfect proxy for total Chinese students in the United States in a given year, as it double-counts those who enter the country twice and doesn’t count those who remain in the United States the entire year. These two effects, however, will partially offset one another.

Travel
Data on Chinese travel spending is from the same NTTO sources as for education spending, with travel spending calculated by subtracting Education-Related receipts and education-related Passenger Air Travel receipts from the totals provided.

The NTTO has yet to publish the precise breakdown of total travel and tourism-related exports for 2019, so we estimated the proportion of total such exports attributable to travel using the average proportion over the previous nine years. Data on purpose of trip, length of stay, and destinations are from survey data in the NTTO’s “Market Profile: China” publication.

Credits
Research: Matt Sheehan, Neil Thomas
Design: Annie Cantara
Development: Chris Roche

 

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