Washington’s policies toward Beijing have been cited as one of the main reasons
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Chinese businesses have been slashing their investments in the US in the face of worsening bilateral relations and challenging business conditions, the Financial Times reported on Tuesday, citing data from the Rhodium Group think tank.
According to the report, Chinese financial input in America plunged to a mere $2.5 billion in 2022, the lowest in over a decade, and far below the record of $48 billion in 2016. The business activity of Chinese companies operating in the US was also shrinking, the data showed.
“The environment in the US has become more challenging for Chinese investors,” Adam Smith, a partner at law firm Gibson Dunn and a former US Treasury adviser, told the FT.
In a recent survey by the US-based China General Chamber of Commerce, over 80% of Chinese companies saw the deterioration in bilateral relations and “unstable US policies towards foreign investment” as the biggest challenges.
“We used to be a panda… We were liked by everybody. But then, we became the skunk, and people are afraid of getting close… People say, ‘Oh, as long as you carry the name, it looks like you’re Chinese. If you’re Chinese, then we’re concerned,” Pin Ni, head of Wanxiang America, a branch of a Chinese car parts maker that has been present in the US market for over 30 years, told the FT.
US officials have labeled Beijing as Washington’s top economic rival, accusing Chinese firms of everything from theft of US intellectual property to espionage on American citizens. Under President Donald Trump, Washington placed tariffs on billions worth of Chinese goods, effectively declaring a trade war. His successor Joe Biden has maintained that approach, blacklisting dozens of Chinese tech companies, banning outbound investment in strategic sectors of the US economy, and introducing export controls on semiconductors. Beijing has accused Washington of acting in breach of global trade agreements and targeting Chinese businesses for its own economic gain.
Meanwhile, market experts have been warning that cutting ties with Chinese investors in particular, and foreign investors in general, would be bad for the US economy.
“The question is: is it only China, or is it then other jurisdictions? How much do we want to retreat from the world?” Smith from Gibson Dunn told the news outlet.
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