Beijing says investor curbs may backfire
China will closely watch and fully evaluate the potential impact on Chinese companies of the planned investment restrictions expected to be announced by the administration of United States President Donald Trump, the Ministry of Commerce said in a statement on Wednesday.
The ministry released the brief statement before the possible unveiling of a new rule by Washington this week that would limit Chinese investment in technology firms in the US.
“Such a rules-breaking practice shows that the US has already brought the tension from the field of trade to the area of investment. It will push global investors, especially those from China, Germany, France and Japan, to lose trust in the US market,” said Li Yong, a senior fellow with the China Association of International Trade.
The possible loss of investment from major economies to the US would not only affect the job market, manufacturing, research and development in the US, but also would cause stock, bond and foreign exchange markets there to decline.
Wei Jianguo, former viceminister of commerce, said the US should treat investors from all countries on equal footing and create a stable and predictable environment for foreign companies.
It is pitiful that the US is trying to maintain economic hegemony, and many countries may adopt countermeasures to ensure their companies’ interests in overseas markets, Wei said.
“The US has been in control of most aspects of the global manufacturing value chain, and has organized global cooperation in a way that benefits itself the most. It is actually not the correct choice for an economic superpower to do so,” Wei said.
Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said China, to a large extent, will benefit in the long run from healthy competition with the US because moderate external competition pressure encourages self-improvement and a shift from the US to European countries, Japan and South Korea in outbound direct investment.
On Wednesday, Trump suggested his administration may back away from previously announced plans to impose limits on Chinese investment in US technology companies and high-tech exports to China, instead choosing to call upon Congress to act, The Associated Press reported.
When asked, “What are you looking at in terms of Chinese investment restrictions?” by reporters at the White House, Trump replied, “Well, it’s not just Chinese.”
He added that the US has the greatest technology in the world, and the country has to protect that, and that can be done through CFIUS.
CFIUS is the Committee on Foreign Investment in the United States, an interagency panel that considers national security implications of foreign acquisitions of US businesses.