Foreign investors still feasting on u.s. securities

oversea investors continue to gobble up exchequer notes and bonds -- a must for the United States to continue financing the trade shortage. The exchequer Department's most recent report shows that net foreign investment in long-maturing government securities nearly doubled from March to April, contempt the depressed dollar and the continuing roller coaster ride in world financial markets.

working capital from emerging nations also continues to pour in to U.S. Companies as authorities wealth funds and buck private investors remain confident in the efficiency and transparence of our financial system -- for now, anyhow. The subprime mortgage fiasco and the cleft it has exposed in securities regulation could negatively impact that mentality, and some economic expert are start to sound alarm bells. An eroding of assurance could send oversea investors elsewhere in hunt of higher returns on their money, which could strain the U.S. Economic system to a breakage point.

China, the top foreign purchaser of U.S. Securities, is the biggest concern -- specifically the Chinese government, which has remained committed to investment in U.S. Plus despite the dollar's decline. This dependance on funds from Peking has sparked concerns in both the populace and buck private sector.

The U.S. Authorities recently initiated talks with China to develop a bilateral investment understanding. The two-day meeting that took place before this month doesn't mean that there will be an investing treaty -- and any eventual treaty will not cover the financial services sector, the most sensitive area of concern in the U.S. But exchequer officials assess the opportunity of negotiating an understanding with similar standards to U.S. Bilateral investment treaties with other state as "moderately good," The Wall Street Journal study. China already has such treaties with close to 40 other state. But compared to the time frame it's taken for the U.S. To develop such treaties with other countries, progress has been slow, resulting in criticism for Treasury Secretary Henry Paulsen

Businesses with strong ties to the upcoming Olympics in China might look at the government's progress in treaty negotiations with that country more patiently as they grapple with the many levels of complexity in that nation. "If you're making the business decisions, how do you show your support for human rights, your respect for your host country, your good citizenship in your home country, your need for open markets, your concern for the safety of your employees and your accountability to your shareholders -- all at the same time?" asks Dr. Greg Young, associate professor of business ethics and strategy at North Carolina State University.

Clearly, we're only in the early stages of a total realignment of the global economic landscape, where China will continue to be a star player.