Prime Highlights:
Chinese investments in the U.S. have significantly dropped since Donald Trump’s first term.
Experts predict that this trend is unlikely to reverse with Trump’s return to the White House.
Chinese companies are focusing more on joint ventures and greenfield investments rather than high-profile acquisitions.
Key Background:
Chinese investment in the U.S. has experienced a significant decline since the beginning of Donald Trump’s first term as president, and experts believe this downward trend is unlikely to reverse with his return to office. According to recent data from the American Enterprise Institute, Chinese investments in the U.S. have dropped drastically from $46.86 billion in 2017 to just $860 million in the first half of 2024, signaling a marked reduction in capital flows.
Rafiq Dossani, an economist at the RAND Corporation, explained that Trump’s approach to China, characterized by tariffs and a broader ideological stance against Chinese economic influence, is not conducive to fostering investment from Chinese companies. This trend aligns with regulatory actions in both the U.S. and China, which have intensified since 2017, making large-scale investments more difficult.
While Chinese companies continue to invest in the U.S., the nature of these investments has shifted. Chinese businesses now prefer joint ventures and small-scale projects rather than large acquisitions, such as the notable deal involving EVE Energy and Cummins to establish a battery manufacturing facility in Mississippi. These smaller investments are less likely to attract significant attention from regulators.
Furthermore, individual U.S. states are increasingly wary of Chinese investments, with more than 20 states passing laws that restrict land purchases by Chinese entities. Despite this, Chinese e-commerce companies have continued to establish local offices, reflecting a shift in focus from manufacturing to service-oriented ventures. With Trump’s policy stance remaining firm and the uncertainty surrounding his long-term approach, the outlook for large Chinese investments in the U.S. appears cautious, signaling a continued trend of limited engagement in the coming years.
