Chinese Investments in the US are on a Downward Trend
Chinese investments in the United States have dramatically declined since Donald Trump’s first term. The trend is unlikely to reverse as he returns to the White House, analysts say. Trump has threatened additional tariffs on Chinese goods, building on an increasingly tough US stance on Beijing.
In the last few weeks, Emirati property giant Damac has pledged $20 billion to build data centers in the US, and SoftBank CEO Masayoshi Son has announced a $100 billion investment in artificial intelligence development in the US over Trump’s four-year term. However, Chinese investments have slowed drastically, with only $860 million flowing into the US in the first six months of 2024, down from $1.66 billion in 2023 and $46.86 billion in 2017.
Regulators on both sides have stemmed the flow of Chinese investments, and Beijing has tightened control over capital outflows since 2017. As a result, Chinese companies have turned to small joint ventures with US companies or greenfield investments, such as a joint venture between Chinese battery manufacturing company EVE Energy and US engine company Cummins’ Accelera division to build a battery factory in Mississippi.
Individual US states have also grown increasingly wary of Chinese investment, with more than 20 states passing new restrictions on land purchases by Chinese citizens and companies. Chinese hackers have also targeted a government office that reviews foreign investment in the US, part of a wider breach of the Treasury Department.
Deal-making strategy? Trump has indicated that tariffs may be used to coerce Chinese investment in the US, and Chinese companies such as battery giant CATL have expressed interest in building a US plant if allowed. However, experts point out that even if Trump welcomed more Chinese investment or coerced it through tariffs, large investments are long-term processes that won’t happen overnight, and the president’s policies are unpredictable.
