China restricts companies from investing in US as tensions riseSeveral branches of the National Development and Reform Commission were said to have been instructed in recent weeks to hold off on registration and approval for firms that are looking to invest in the US.
While China has previously placed restrictions on some overseas investments for reasons linked to concerns about national security and capital outflows, the new measures underscore tensions playing out between the world’s two biggest economies as Donald Trump ramps up tariffs.
China’s outbound investments into the US totalled US$6.9 billion (RM30.6 billion) in 2023, according to the latest available figures.
There’s no sign that existing commitments by Chinese companies in the US and elsewhere, or China’s purchases and holdings of financial products including US Treasuries, would be affected, the people said.
It’s unclear what prompted the NDRC to halt the processing of applications or how long this suspension might last.
China has already been increasing scrutiny of outbound investments by domestic companies after
record capital outflows put pressure on the yuan .
While the latest restriction mostly applies to corporate investment in the US, the move adds uncertainty for firms that are seeking to shift production abroad to bypass the trade barriers and attempt to navigate an intensifying global standoff.
The latest data from China’s Ministry of Commerce showed outbound investments into the US slumped 5.2% in 2023 despite an increase of 8.7% into all foreign countries.
The cumulative stock of China’s investment in the US accounted for only 2.8% of the total at the end of 2023.
Domestic companies planning investment projects abroad are required to follow filing and approval procedures that usually involve the Ministry of Commerce, the NDRC and the State Administration of Foreign Exchange.
Source: Bloomberg
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