Chinese investment into US plunged in 2017 on policy changes: Report

SHANGHAI: Chinese investment into the United States fell more than a third last year to US$29 billion (RM112 billion) from a record US$46 billion in 2016, the first major correction in a decade, a report by the Rhodium Group and the National Committee on USChina Relations showed.

The main culprit was government policy on both sides of the Pacific, namely Beijing’s efforts to crack down on outbound capital flows and Washington’s intensified screening of Chinese acquisitions in America, said the report issued yesterday.

The report by the New York-based consultancy and the non-profit business lobby comes at a time of heightened friction between China and the US over trade, and warns that “policy bellicosity especially from Washington” was casting a darker shadow over the economic relationship.

“This more problematic political environment is likely not just transient but rather the new normal. Changing policy attitudes on both sides are deepseated, not just tactical ploys,” said the report.

In 2017, the value of announced foreign direct investment deals from China into the US plummeted by more than 90% from the year before, while much of the money that continued to flow into America was carryover from 2016 deals, the report said.

US investment in China, meanwhile, was basically flat at US$14 billion last year from US$13.8 billion the year before, it said. – Reuters