Cho Tak Wong, chairman of auto glass giant Fuyao Glass, bought a vacant General Motors plant in Moraine, Ohio in 2014.
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Chinese investment in the US has declined dramatically since the first term of Donald Trump. This trend is unlikely to reverse when Trump returns to the White House, analysts say.
Trump there is threatened additional tariffs on Chinese goods shortly after his inauguration on Monday, building on an increasingly tough US stance towards Beijing.
“That’s probably the last thing on Trump’s mind, he’s trying to push him [Chinese companies] to invest here,” said Rafiq Dossani, an economist at the US think tank RAND.
“There is an ideological mismatch. All the rhetoric is, keep China out of the US, let their products in, which are cheap,” he said in an interview earlier this month. But other than that, “don’t, don’t let them in.”
In the past few weeks, the Emirati real estate giant Damac promised 20 billion dollars build data centers in the US, while SoftBank CEO Masayoshi Son announced a An investment of 100 billion dollars for the development of artificial intelligence in the US during Trump’s four-year term.
Chinese investment deals in the US have slowed drastically, according to the latest data Data from the American Enterprise Institute. Just $860 million came into the U.S. in the first six months of 2024, after $1.66 billion in 2023. That’s a sharp drop from $46.86 billion in 2017, when Trump began his first term.
At its peak, Chinese companies made high-profile acquisitions in the US, such as buying Waldorf Astoria Hotel in New York. But regulators on both sides have stemmed the flow.
“Chinese investment in the US has slowed dramatically since Beijing tightened controls on capital outflows in 2017, followed by a series of US regulatory policies aimed at excluding investments in certain sectors” Danielle Goh, senior research analyst at Rhodium Group, said in an email.
In the “foreseeable future,” she does not expect Chinese investment in the U.S. to recover to the peak levels seen during the 2016-2017 period. Goh pointed out that instead of acquisitions, Chinese companies have turned more to small joint ventures with American companies or greenfield investments, in which a business is built from scratch.
For example, Chinese battery company EVE Energy is a technology partner with a 10% stake in 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 plant 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 mostly helped Chinese e-commerce companies set up local offices rather than set up manufacturing companies, the nonprofit’s president, Siva Yam, told CNBC.
“Most of those investments today are a little bit smaller, so they’re not on the radar, they’re easier to approve,” he said, referring to regulators in the U.S. and China. But he remained uncertain whether Chinese companies could use investment to offset the impact of the tariffs.
Certain American states have become increasingly wary of Chinese investments. Last spring, Politico reported it more than 20 countries they enacted new restrictions on land purchases by Chinese citizens and companies or updated existing rules.
In December, Chinese hackers attacked a government office that vets foreign investment in the United States, CNN reportedciting US officials. This was part of a broader breach by the Treasury Department, which declined CNBC’s request for comment.
A deal-making strategy?
Trump has indicated that the tariffs could be used to force Chinese investment into the US
In his acceptance speech for the Republican nomination, he said, “I will bring auto 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’re going to sell their products in America is BUILD it in Americaand ONLY in America. It will create tremendous jobs and wealth for our country,” he said, according to an NBC News transcript.
Chinese battery giant CATL reportedly said in November that it would build an American factory if Trump allows it. The company did not immediately respond to a request for comment.
The advocacy group Center for American Progress pointed out in December that during his first term Trump lifted the restrictions on Chinese telecommunications company ZTE — just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization-linked theme park in Indonesia.
Trump’s transition team did not immediately respond to a request for comment on the ZTE deal or the possibility of Chinese companies investing in the US
Even if Trump were to welcome more Chinese investment or force it through tariffs, large-scale investment is a long-term process that won’t happen overnight, said Derek Scissors, a senior fellow at the American Enterprise Institute.
There is also the unpredictability of the newly elected president’s policy.
“Trump’s statement that the US is open to Chinese companies in 2025 is no guarantee [even] for 2029,” he said.
