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Cho Tak Wong, chairman of auto glass giant Fuyao Glass, bought the vacant General Motors plant in Moraine, Ohio, in 2014.
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Chinese investment in the US has plummeted since Donald Trump’s first term. According to analysts, this trend is unlikely to change when Trump returns to the White House.
Trump mine threatens additional tariffs on Chinese goods shortly after his inauguration on Monday, building on the increasingly tough US stance on Beijing.
“That’s probably the last thing on Trump’s mind is trying to incentivize (Chinese companies) to invest here,” said Rafiq Dasani, an economist at the US think tank RAND.
“There is an ideological discrepancy. The whole rhetoric is to keep China out of the US, let them get their products, which are low-cost,” he said in an interview earlier this month. But other than that, “no, don’t let them in.”
Over the past few weeks, the Emirati real estate giant Damac has pledged $20 billion to build data centers in the US, while SoftBank CEO Masaeshi Son announced a $100 billion in investment for the development of artificial intelligence in the US during the four-year term of Trump.
According to the latest data, Chinese investment deals in the US have slowed down dramatically Data from the American Enterprise Institute. Only $860 million flowed into the U.S. in the first six months of 2024, after $1.66 billion in 2023. That’s down sharply 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 a company Waldorf Astoria Hotel in New York. But regulators on both sides have stemmed the flow.
“Chinese investment in the U.S. has slowed sharply since Beijing tightened controls on capital outflows in 2017, followed by a series of regulatory policies in the U.S. aimed at excluding investments in individual sectorsDaniel Guo, senior analyst at Rhodium Group, said in an email.
In the “foreseeable future,” she does not expect Chinese investment in the U.S. to return to the peak levels seen between 2016 and 2017. Goh noted that instead of takeovers, Chinese companies are turning more to small joint ventures with American companies or ground-up investments, where businesses are 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 Cummins, Daimler Truck and PACCAR. In June 2024, the companies announced that they were beginning to plan to build 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 plants, the nonprofit’s president, Siwa Yam, told CNBC.
“Most of these investments nowadays tend to be a little bit smaller, so they’re off the radar, they’re easier to get approved,” he said, referring to regulators in both the U.S. and China. But he remained uncertain about whether Chinese companies could use the investment to offset the impact of the tariffs.
Some US states are increasingly wary of Chinese investment. This was reported by Politico last spring more than 20 states adopted new restrictions on the purchase of land by Chinese citizens and companies or updated existing regulations.
In December, Chinese hackers attacked the government agency that reviews foreign investment in the US. This is reported by CNNciting US officials. It was part of a broader breach by the Treasury Department, which declined CNBC’s request for comment.
A deal making strategy?
Trump indicated that the tariffs could be used to force Chinese investment in the United States
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.” .
“They will sell their products in America like this BUILD it in Americaand ONLY in America. It will create tremendous jobs and wealth for our country,” he said, according to a transcript from NBC News.
In November, Chinese battery giant CATL reportedly said it would build a plant in the US if Trump would allow it. The company did not immediately respond to a request for comment.
Human rights group the Center for American Progress noted in December that during his first term Trump lifted the restrictions about 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 opportunities for Chinese companies to invest in the U.S.
Even if Trump welcomed more Chinese investment or forced it through tariffs, big investments are long-term processes that won’t happen overnight, said Derek Scissors, a senior fellow at the American Enterprise Institute.
Next is the unpredictability of the president-elect’s policy.
“Trump’s claim that the US is open to Chinese companies in 2025 is not a guarantee (even) until 2029,” he said.
