Politics

Chinese investment in US drops to lowest level since recession

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China’s direct investment in the United States fell last year to its lowest level since the Great Recession, even before the coronavirus pandemic shut down much of global commerce.

The decline in Beijing’s investment in the United States reflected tensions between the world’s two biggest economies and Chinese government restrictions on overseas investment.

A report out Monday from the National Committee on U.S.-China Relations and the Rhodium Group consultancy found that China’s direct investment in the U.S. dropped from $5.4 billion in 2018 to $5 billion last year, the lowest level since the recession year of 2009. The direct investment includes mergers, acquisitions, and investments in things like offices and factories but not financial investments like purchases of stocks and bonds.

The report found that Chinese direct investment in the United States virtually vanished — to $200 million — from January-March this year as the coronavirus pandemic hammered the world economy.

U.S. investment in China ticked up last year — to $14 billion from $13 billion in 2018. But that increase primarily reflected previously announced projects, including Tesla’s factory in Shanghai.

Two-way investment between the United States and China fell to a seven-year low, the report found.

U.S. regulators, worried that China will gain access to sensitive American technology, have been taking a harder look at Chinese investment in the United States, a shift mandated by a 2018 law.

Report

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