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U.S.-China Trade War Has Under Biden

U.S.-China Trade War Has Under Biden

Shortly after President Joe Biden…

Josh Owens

Josh Owens

Writer, Safehaven.com

Josh majored in International Relations at the University of Edinburgh and is currently the Content Director at Oilprice.com. Josh has over 6 years of writing…

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Chinese Investment In The U.S. Has Plunged By 90%

Chinese Investment

Since Trump took office, Chinese investment in the US has plunged nearly 90%, with Chinese direct investment falling last year to its lowest level since 2009. The pandemic indicates that the new cold war is on, and the numbers are about to get worse.

Chinese investment in the United States dropped to US$5 billion in 2019, a slight decrease from a year earlier and the lowest level for the past decade, according to a new report by the National Committee on U.S.-China Relations. 

And for 2020, Chinese direct investment in the United States is $200 million, down from an average of $2 billion per quarter in 2019.

“The worsening bilateral relationship and a growing public backlash against China in the US make it likely that Chinese buyers will also face significant political opposition to any big acquisition,” the report said.

The direct investment includes mergers, acquisitions and investments in things like offices and factories but not financial investments like purchases of stocks.

Indeed, Chinese direct investments have been steadily declining since 2018 when it fell to just $4.8 billion--a massive decline from $29 billion in 2017 and $46 billion in 2016. 

On the flip side of this equation, US investment in China increased slightly in 2019 to $14 billion, up from $13 billion a year earlier. That increase is thanks to Tesla’s new factory in Shanghai and the expansion of General Motors’ joint venture there.

But the past few weeks have seen relations between the two countries spiral downward sharply. 

Recently, President Trump launched a Twitter “campaign” blaming China’s early handling of the coronavirus outbreak which has caused 81,000 of deaths and more than 30 million job losses in the United States alone. 

The administration is currently weighing a long-term plan to punish China on multiple fronts for the coronavirus pandemic, including leveling new tariffs on imports from China. 

A recent proposal by some US officials on how to deal with China is likely a very sobering moment for Chinese money. 

Earlier this month, Republican congressman Matt Gaetz suggested that the US go as far as to seize the assets of Chinese businesses to cover coronavirus damage payments. 

“Instead of bailing out Chinese businesses in the United States, we should seize their assets and put them in receivership to pay damages to Americans,” Gaetz said.

The administration is reportedly considering stripping Beijing of its sovereign immunity, as well, which would allow the US government or private citizens to sue China. Another idea on the table is canceling some or all of the interest payments on the more than $1 trillion in debt the US owes to China.

Senate Republicans have also called for economic sanctions; cancellation of visas for Chinese officials and families; and investigations into the pandemic, including China’s culpability.

That means that the pre-pandemic trade war could pale in comparison to what is to come next. 

Previously, the US administration had imposed tariffs on about $360 billion worth of Chinese goods. In January, the two countries reached an interim trade agreement intended to ease the tension, calling on China to buy $200 billion in US products--but all of that was overshadowed by the pandemic. 

In the meantime, America is missing out on Chinese money: That’s the sacrifice for a new Cold War that will determine global technological dominance--a war that won’t be won by the United States if it allows Beijing access to sensitive technology. 

By Josh Owens for Safehaven.com 

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