Online Reporter
Chinese investments in the US have dramatically declined since Donald Trump’s first term. This trend is unlikely to reverse as Trump returns to the White House, analysts said.
Trump has threatened additional tariffs on Chinese goods soon after his inauguration on Monday, building on an increasingly tough US stance on Beijing.
“That’s probably the last thing on Trump’s mind, is trying to incentivise [Chinese companies] to invest here,” said Rafiq Dossani, an economist at US-based think tank RAND.
“There’s an ideological mismatch. All the rhetoric is, keep China out of the US, let their products come in, which are low-end,” he said in an interview earlier this month. But other than that, “don’t, don’t let them come in.”
In the last several weeks, Emirati property giant Damac has pledged US$20 billion to build data centers in the US, while SoftBank CEO Masayoshi Son announced a US$100 billion investment for artificial intelligence development in the US over Trump’s four-year term.
Chinese investment deals in the US have slowed drastically, according to the latest American Enterprise Institute data. Just US$860 million flowed into the US in the first six months of 2024, following US$1.66 billion in 2023.
That’s down sharply from US$46.86 billion in 2017, when Trump began his first term.
At the peak, Chinese companies had made high-profile US acquisitions, such as buying the Waldorf Astoria hotel in New York. But regulators on both sides have stemmed the flow.
“Chinese investment in the US has slowed down dramatically since Beijing tightened control over capital outflows in 2017, followed by a series of regulatory policies in the US aimed at excluding investments in certain sectors,” Danielle Goh, senior research analyst at Rhodium Group, said in an email.
In the “foreseeable future,” she doesn’t expect Chinese investments in the US will recover the peak levels seen during the 2016 to 2017 period. Goh pointed out that instead of acquisitions, Chinese companies have turned more to small joint ventures with US companies or greenfield investments, in which business are built from scratch. — CNBC
