US reshaping rules in bid for economic hegemony
US President Donald Trump reportedly plans to impose restrictions on Chinese companies investing in US tech firms and blocking even more high-tech exports to China under the guise of protecting national security, but such a rules-breaking practice is politicizing business and will lead to investors, Chinese or not, losing trust in the US market. Even though Chinese investments in the US are mutually beneficial — creating jobs, contributing taxes, and bringing funds to the US market — the restrictive measures, which could be announced by the end of this week, are an indication that the Trump administration intends to further obstruct normal business exchanges between China and the United States.
By blocking companies with at least 25 percent Chinese ownership from buying US firms involved in “industrially significant technology”, the Trump administration is attempting to prevent China from growing into a more competitive rival by creating obstacles to the implementation of its Made in China 2025 plan, which the Trump administration views as China’s bid to stake its leadership in the key industries of the future.
Under the administration’s existing restrictions, US data show that China’s investment in US companies had already slumped to $29.4 billion last year from $46.2 billion in 2016. And the move, if finalized, will prompt more enterprises from China to think twice before investing in the US. They will naturally be more cautious about pursuing mergers and acquisitions with US companies knowing that whether a deal is completed or not will be at the whim of the Trump administration.
While it is not clear yet whether the move will achieve its intended aim of curbing China’s competitiveness, it is certain to aggravate the trade feud between the two sides, which is already roiling the global economy.
And while ostensibly, the move only targets foreign companies with a sizable Chinese stake, it sends a dangerous message that the Trump administration will take whatever measures it deems necessary to achieve its policy agenda, regardless of commonly accepted business rules and the business norms that have existed over past decades.
The US should treat investors from all countries on an equal footing and create a fair and predictable environment for global investors. Instead, it is intent on attaining economic hegemony.
The willful reshaping of rules in this way is so the US can have the development of other countries under its control. That is something countries should rally together to oppose.