Cho Tak Wong, chairman of auto glass giant Fuyao Glass, purchased General Motors' vacant manufacturing plant in Moraine, Ohio, in 2014.
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Chinese investment in the US has declined dramatically since Donald Trump's first term. Analysts say this trend is unlikely to reverse if Trump returns to the White House.
Trump threatened additional tariffs on Chinese goods shortly after taking office on Monday, building on an increasingly tough U.S. stance toward Beijing.
“That’s probably the last thing on Trump’s mind, providing stimulus.” [Chinese companies] to invest here,” said Rafiq Dossani, economist at the US think tank RAND.
“There is an ideological mismatch. The whole rhetoric is: Keep China out of the US and let their products come in, which are cheap,” he said in an interview earlier this month. But otherwise: “Don’t let them in.”
In recent weeks, Emirati real estate giant Damac has pledged $20 billion to build data centers in the US, while SoftBank CEO Masayoshi Son has pledged a $100 billion investment to develop artificial intelligence in the US under Trump announced a four-year term.
According to the latest data from the American Enterprise Institute, Chinese investment deals in the US have slowed dramatically. In the first six months of 2024, just $860 million flowed into the US, down from $1.66 billion in 2023. That's a significant decrease from $46.86 billion in 2017, when Trump began his first term in office.
At its peak, Chinese companies had made high-profile acquisitions in the United States, such as the purchase of the Waldorf Astoria Hotel in New York. But regulators on both sides have curbed the flow.
“Chinese investment in the US has slowed dramatically since Beijing tightened controls on capital outflows in 2017, followed by a series of regulatory measures in the US aimed at barring investment in certain sectors,” said Danielle Goh, senior research analyst at Rhodium Group in an email.
It expects Chinese investment in the US will not return to the highs seen in 2016-2017 in the “foreseeable future”. Goh pointed out that rather than acquisitions, Chinese companies tend to rely on small joint ventures with U.S. companies or greenfield investments that build the business from the ground up.
For example, the Chinese battery manufacturer EVE Energy is a technology partner with a 10% stake in a joint venture with the Accelera division of the US engine manufacturer Cummins, Daimler Truck and PACCAR. The companies announced in June 2024 that they were launching plans for a battery factory in Mississippi that would begin production in 2027 and create more than 2,000 jobs.
Since the Covid-19 pandemic, the U.S.-China Chamber of Commerce has mostly helped Chinese e-commerce companies set up local offices rather than setting up manufacturing companies, the nonprofit organization's president, Siva Yam, told CNBC.
“Nowadays, most of these investments tend to be a little smaller, so they are off the radar and easier to approve,” he said, referring to regulators in both the U.S. and China. But he remained uncertain whether Chinese companies could use investments to offset the impact of tariffs.
Individual US states have become increasingly wary of Chinese investments. Last spring, Politico reported that more than 20 states were imposing new restrictions on land purchases by Chinese citizens and companies or updating existing rules.
Chinese hackers in December targeted a government office that reviews foreign investments in the United States, CNN reported, citing U.S. officials. This was part of a broader breach by the Treasury Department, which declined CNBC's request for comment.
Deal making strategy?
Trump has suggested that tariffs could be used to force Chinese investment in the US
In his speech accepting the Republican nomination, he said: “I will bring back automotive jobs in our country through the proper use of taxes, tariffs and incentives, and will not allow huge ones in Mexico, China and China Automobile factories will be built.” or other countries.”
“The way they sell their product in America is to BUILD it in America, and ONLY America. This will create tremendous jobs and wealth for our country,” he said, according to a transcript obtained by NBC News.
Chinese battery giant CATL reportedly said in November it would build a US factory if Trump allowed it. The company did not immediately respond to a request for comment.
The advocacy group Center for American Progress pointed out in December that Trump lifted restrictions on Chinese telecommunications company ZTE during his first term, just days after the Chinese government and Chinese banks invested $1 billion in a Trump Organization affiliate Theme park had invested in Indonesia.
The Trump transition team did not immediately respond to a request for comment on the ZTE deal or the ability of Chinese companies to invest in the United States
Even if Trump welcomes more Chinese investment or forces it through tariffs, major investments are long-term processes that won't happen overnight, emphasized Derek Scissors, senior fellow at the American Enterprise Institute.
Added to this is the unpredictability of the president-elect's policies.
“Trump’s claim that the US will be open to Chinese companies in 2025 is not a guarantee [even] for 2029,” he said.