Cho Tak Wong, president of auto glass giant Fuyao Glass, bought Common Motors’ empty manufacturing plant in Moraine, Ohio, in 2014.
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Chinese investments in the United States have declined sharply since Donald Trump’s first term. This trend is unlikely to reverse when Trump returns to the White House, analysts said.
Trump has threatened additional tariffs on Chinese goods shortly after his inauguration on Monday, taking advantage of an increasingly tough US stance toward Beijing.
“That’s probably the last thing on Trump’s mind: trying to encourage (Chinese companies) to invest here,” said Rafiq Dossani, an economist at the U.S.-based think tank RAND.
“There is an ideological imbalance. “All the rhetoric is to keep China out of the United States and let their products in, which are low-end,” he said in an interview earlier this month. But other than that, “no, don’t let them in.”
In recent weeks, Emirati real estate giant Damac has pledged $20 billion to build data centers in the United States, while SoftBank CEO Masayoshi Son announced a $100 billion investment for the development of artificial intelligence in the United States during Trump’s four-year term.
Chinese investment deals in the US have slowed sharply, latest report says Data from the American Business Institute. Just $860 million flowed into the U.S. in the first six months of 2024, after $1.66 billion in 2023. That’s a sharp decline from $46.86 billion in 2017, when Trump began his first term. .
At their peak, Chinese companies had made high-profile American acquisitions, such as the purchase of the Waldorf Astoria lodge in New York. But regulators on both sides have stemmed the flow.
“Chinese investment in the US has slowed dramatically since Beijing tightened management on capital outflows in 2017, followed by a series of regulatory policies in the US aimed at excluding investments in certain sectors,” Danielle said. Goh, senior research analyst at Rhodium Group. in an email.
In the “foreseeable future,” he does not expect Chinese investments in the United States to recover the maximum levels observed during the 2016-2017 period. Goh noted that instead of acquisitions, Chinese companies have turned more to small joint ventures with American companies or greenfield investments, in which businesses are built from scratch.
For example, Chinese battery manufacturing company EVE Power is the technology partner with a 10% stake in a joint venture with the Accelera division of the American engine company Cummins, Daimler Truck and PACCAR. The companies announced in June 2024 that they were launching plans for a battery factory in Mississippi that would begin production in 2027 and create more than 2,000 jobs.
Since the Covid-19 pandemic, the US-China Chamber of Commerce has mainly helped Chinese e-commerce companies set up local offices, rather than setting up manufacturing businesses, the nonprofit’s president told CNBC. profit, Siva Yam.
“Most of those investments today tend to be a little bit smaller, so they’re not on the radar and easier to approve,” he said, referring to regulators in both the United States and China. But he remained unsure whether Chinese companies could use investments to offset the impact of the tariffs.
Individual US states have become increasingly cautious about Chinese investment. Last spring, Politico reported that more than 20 states They were approving new restrictions on the purchase of land by Chinese citizens and companies, or updating existing rules.
In December, Chinese hackers attacked a government office that reviews foreign investment in the United States. CNN reportedciting US officials. This was part of a broader violation by the Treasury Department, which declined a request for comment from CNBC.
Strategy to reach agreements?
Trump has indicated that tariffs can be used to coerce Chinese investment in the US.
In his speech accepting the Republican nomination, he said: “I will bring automotive jobs back to our country, through the proper use of taxes, tariffs and incentives, and I will not allow massive auto manufacturing plants to be built in Mexico, China, or other countries.”
“The way they will sell their product in the United States is BUILD IT in Americaand ONLY in the United States. This will create enormous jobs and wealth for our country,” he said, according to a transcript from NBC Information.
Chinese battery giant CATL reportedly said in November that it would build a plant in the United States if Trump allowed it. The company did not immediately respond to a request for comment.
The advocacy group Heart for American Progress noted in December that during his first term, Trump canceled restrictions on Chinese telecommunications company ZTE, just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-affiliated theme park in Indonesia.
Trump’s transition team did not immediately respond to a request for comment on the ZTE deal or opportunities for Chinese companies to invest in the US.
Even if Trump were to welcome more Chinese investment or force it through tariffs, big investments are long-term processes that won’t happen overnight, said Derek Scissors, a senior fellow at the American Enterprise Institute.
Then there is the unpredictability of the president-elect’s policies.
“Trump saying that the United States is open to Chinese companies in 2025 is no guarantee (even) for 2029,” he said.
