US Shoots Itself in Foot in Trade Stand-Off as Chinese Investment Drops 30%

US Shoots Itself in Foot in Trade Stand-Off as Chinese Investment Drops 30%

Guo Liqin & Feng Difan

Date: Thu, 04/12/2018 - 18:58 / source:Yicai
US Shoots Itself in Foot in Trade Stand-Off as Chinese Investment Drops 30%
US Shoots Itself in Foot in Trade Stand-Off as Chinese Investment Drops 30%

(Yicai Global) April 12 -- Chinese companies’ investment in the US fell sharply, to USD29.4 billion last year from USD45.2 billion in 2016, a drop of up to 35 percent. Of this, USD18 billion was announced in 2016, but completed in 2017, a recent report shows.

Titled ‘Updated Version in 2018: Trends in Two-Way Investment between China and the United States,’ the report was jointly released by the National Committee on United States - China Relations, a not-for-profit institution that encourages understanding and cooperation between the US and China, and research consultancy and advisory firm the Rhodium Group LLC.

China’s non-financial direct investment was USD120 billion in 2017, of which USD7.8 billion was invested in the US, making up 6.5 percent of the total, data provided by China’s commerce ministry show.

Intervention by the Committee on Foreign Investment in the United States (CFIUS) under the US treasury department last year caused about USD8 billion worth investments in the US to ultimately be called off in the areas of semiconductors, aluminum and others, the report also noted.

Peering into the future of China-US investment, the report said that, factoring in the US Congress’ plan to overhaul the US investment screening system, the Trump administration’s 301 investigation response measures also include actions against China’s foreign direct investment behavior. Room still exists for two-way investment growth in the future, but more rigid screening for investments in the US causes the risk of strategic conflict between the two countries to threaten future growth.

The Trump administration may have more protectionist measures up its sleeve, Simon Baptist, chief economist at the Economist Intelligence Unit (EIU), a UK-based division of the Economist Group that provides forecasting and advisory services based on research and analysis,

warned in an exclusive interview with Yicai Global.

"The United States should not look at Chinese companies’ investment in the United States through tinted glasses," saying that "if the United States insists on looking at Chinese corporate investments with bias and taking discriminatory measures, China will certainly respond and will certainly defend its legitimate rights and interests," China’s commerce ministry said in a statement posted on its official WeChat messaging app account on April 11.

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Keywords: Tianjin Tianhai Investment Co., HNA GROUP, Dangdang.com