For me the argument comes down to economics. When I hear people...

For me the argument comes down to economics.

When I hear people complain about foreign investment I have two words for them. They are "Trade deficit". When you run a trade deficit the way to balance it is by having foreign investment or a lower standard of living. I am being very simplistic but in the end this is what it comes down to.

When we buy items from overseas the money needs to come back to us in the form of foreign ownership. Hence if we keep maintaining a trade deficit and want to maintain the same standard of living we need to rely on foreign investment/ownership.

An analogy would be if you were earning $100 a week and were spending $120 a week and there was one shop in town where you did your shopping. In the first week you go there and spend $120 on goods and the shop keeper lends you $20. The next week is the same and so you now owe $40. You keep doing this for some time and now the shop keeper says you have to start paying the money back. To do this you can either start spending less on the goods at the shop and accept a lower standard of living to get rid of the deficit or the shop keeper can start buying some of the items at your house so that you have money to keep spending.

You decide to keep the same lifestyle so you decide to sell your own assets to the shop keeper. This is akin to foreign ownership. However, as there is still a deficit, pretty soon you now have to decide whether you will sell your house and car and be kicked out or now start living within your means. If you choose to keep the house then you will be forced to accept a lower standard of living. If you sell the house you will have more money for a while but if you keep living beyond your means eventually you will be bankrupt and have no standard of living.

This is what is happening in the USA right now and their relationship with China. The buying of USA govt bonds was drying up so they are now printing money to cover the deficit. Now the middle class in the USA are getting poorer and poorer and having to accept a lower standard of living.