Before Covid-19, Chinese direct investment in US dropped to lowest in 2019

Two-way investment between the United States and China fell to a seven-year low, the report found.
China's direct investment in the United States last year fell 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 US reflected tensions between the world's two biggest economies and Chinese government restrictions on overseas investment.

A report released on Monday by the National Committee on US-China Relations and the Rhodium Group consultancy found that China's direct investment in the US dropped from $5.4 billion in 2018 to $5 billion last year, the lowest level since the recession year of 2009.

Direct investment includes mergers, acquisitions and investments in things like offices and factories but not financial investments like purchase of stocks and bonds.

The report found that Chinese direct investment in the US virtually vanished — falling to to $200 million in January-March quarter of this year, as the coronavirus pandemic hammered the world economy.

US investment in China, meanwhile, ticked up last year to $14 billion from $13 billion in 2018. But that increase largely reflected previously announced projects, including Tesla's factory in Shanghai.

Two-way investment between the US and China fell to a seven-year low, the report found. US regulators, worried that China will gain access to sensitive American technology, have been taking a harder look at Chinese investment in the US, a shift mandated by a 2018 law.

The two countries have also sparred over the US charges that China uses abusive tactics, including forcing foreign companies to hand over trade secrets and outright cyber theft, in its effort to surpass American technological dominance.

US President Donald Trump has imposed tariffs on about $360 billion worth of Chinese goods.

The Trump administration and Beijing reached an interim trade agreement in January intended to ease the tension. But the pact was quickly overtaken by the Covid-19 pandemic.


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