Economic strain between the world’s two largest economies has seen Chinese investment in the United States drop nearly 90 percent under President Donald Trump, according to The New York Times.
The steep decrease in direct investment is a result of “tougher regulatory scrutiny in the United States and a less hospitable climate toward Chinese investment, as well as Beijing’s tightened limits on foreign spending.” And it has had a rippling effect across the U.S. economy, from start-ups in Silicon Valley to the real estate market to state governments.
Chinese investment in the U.S. had been increasing for years, the Times noted, pumping money into various industries and “fueling new jobs in Michigan, South Carolina, Missouri, Texas and other states.”
Then came Trump and his trade war.
The president’s love of tariffs coupled with “an increasingly powerful regulatory group that is heavily scrutinizing foreign investment” have made it tougher and more risky for Chinese investors.
At the same time, stricter capital controls in China and an economy that is winding down have made it more difficult for Chinese investors to buy in the U.S.
Increased regulatory scrutiny in the U.S. has also put a chill on American companies partnering with Chinese investors — particularly in real estate.
“The magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.,” Lawrence Yun, chief economist at the realtor’s group, told the Times.