Cho Tak Won, chairman of auto glass giant Fuyao Glass, bought a vacant General Motors manufacturing plant in Moraine, Ohio, in 2014.
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Chinese investment in the United States has fallen dramatically since President Donald Trump’s first term. Analysts said the trend is unlikely to reverse even if Trump returns to the White House.
The United States’ stance toward China has become increasingly tough, with President Trump threatening additional tariffs on Chinese goods shortly after taking office on Monday.
“President Trump probably doesn’t think that way, he’s trying to encourage them.” [Chinese companies] We need to invest here,” said Rafiq Dossani, an economist at the US-based think tank Kland.
“There’s an ideological disagreement. All the rhetoric is to keep China out of the United States and let low-end Chinese products in,” he said in an interview earlier this month. But other than that, “Please don’t, don’t let them in.”
In recent weeks, Emirati real estate giant Damac has pledged $20 billion to build data centers in the U.S., and SoftBank CEO Masayoshi Son has pledged to invest $100 billion in U.S. artificial intelligence development during Trump’s four years in office. announced.
Chinese investment deals in the United States have slowed significantly, according to the latest data from the American Enterprise Institute. Only $860 million flowed into the United States in the first half of 2024, compared to $1.66 billion in 2023. This is a significant decrease from $46.86 billion in 2017, when President Trump began his first term.
At its peak, Chinese companies were making high-profile acquisitions in the United States, including buying New York’s Waldorf Astoria Hotel. But regulators on both sides blocked that trend.
Daniel Go, senior research analyst at Rhodium Group, said: “The Chinese government tightened controls on capital outflows in 2017, followed by a series of U.S. regulatory policies aimed at excluding investment in certain sectors. “Since then, Chinese investment in the United States has slowed dramatically.” By email.
He does not expect Chinese investment in the United States to return to the peak levels seen in 2016-2017 in the “foreseeable future.” Instead of acquisitions, Goh said Chinese companies are looking to small joint ventures with U.S. companies and greenfield investments to build businesses from the ground up.
For example, Chinese battery manufacturer EVE Energy is a technology partner with a 10% stake in a joint venture with US engine company Cummins’ Axela division, Daimler Trucks and PACCAR. In June 2024, the two companies announced plans to build a battery factory in Mississippi with production expected to begin in 2027 and create more than 2,000 jobs.
Since the coronavirus pandemic, the U.S.-China Chamber of Commerce has primarily helped Chinese e-commerce companies set up local offices, rather than manufacturing companies, the nonprofit’s president, Shiva Yam, told CNBC. told.
“Most of these recent investments tend to be a little bit smaller, so they don’t get a lot of attention and are easier to get approved,” he said, referring to regulators in both the U.S. and China. But he remains unsure whether Chinese companies will be able to use investment to offset the impact of tariffs.
States in the United States are increasingly wary of Chinese investment. Last spring, Politico reported that more than 20 states were passing new restrictions or updating existing rules on land purchases by Chinese nationals and companies.
In December, Chinese hackers targeted a government agency that reviews foreign investment in the United States, CNN reported, citing U.S. officials. This was part of a broader violation by the Treasury Department, which declined CNBC’s request for comment.
Trading strategy?
President Trump suggests tariffs could be used to force Chinese investment in US
In his acceptance speech for the Republican nomination, he said, “With the right use of taxes, tariffs, and incentives, we’re going to bring auto jobs back to our country, whether it’s Mexico, China, or other countries.”
“The way they sell their products in America is by manufacturing them in America and only in America. This will create tremendous jobs and wealth for our country,” he said, according to an NBC News transcript. spoke.
Chinese battery giant CATL reportedly announced in November that it would build a factory in the United States if President Trump gives permission. The company did not respond to requests for comment.
The advocacy group Center for American Progress reported in December that during Trump’s first term, days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-related theme park in Indonesia. He pointed out that restrictions on Chinese telecommunications company ZTE have been lifted.
President Trump’s transition team did not immediately respond to requests for comment about the ZTE deal or opportunities for Chinese companies to invest in the United States.
Derek Scissors, a senior fellow at the American Enterprise Institute, said that even if President Trump welcomes more investment from China or forces it through tariffs, large-scale investment is a long-term process. He points out that this will not happen overnight.
Next, there is the unpredictability of the next president’s policies.
“President Trump says the U.S. will be open to Chinese companies in 2025, but that’s not a guarantee.” [even] Toward 2029,” he said.
