ASSESSMENTS

Tit for Tat? The Shape of U.S. Restrictions on Chinese FDI

Feb 10, 2018 | 15:25 GMT

An investor in China examines a map showing investment opportunities in real estate, including in the United States.

A Chinese investor walks past an investment map showing suitable property markets for wealthy Chinese to invest in at the International Property Expo in Beijing on April 11, 2014.

(MARK RALSTON/AFP/Getty Images)

Highlights

In hopes of forcing China to open further, the United States is considering investment restrictions that would mirror those imposed by China.
China’s investment goals are to cement its position in the stable, developed U.S. economy and fuel growth in sectors key to its economic transition.
As such, China has two concerns: Sectors where its own restrictions will mean harsh U.S. measures and those sectors of high priority to Beijing.

In its ongoing pushback against Chinese trade and investment, the White House is reportedly mulling restrictions on Chinese investment that mirror the restrictions imposed by Beijing on U.S. investment. Since 2005, the United States has attracted approximately 10 percent of all outbound Chinese foreign direct investment, or FDI. The amount of Chinese FDI heading to the United States has grown tremendously since 2010 in parallel with more Chinese investment in developed markets, particularly in those that Beijing has sought to beef up domestically. Because of China’s tight investment policies, the possible move by U.S. President Donald Trump's administration could have a major impact on the billions of dollars Beijing pours into U.S. industries, especially sectors that China has prioritized for growth, such as technology, consumer goods and services....

Subscribe to view this article

Subscribe Now

Already have an account?