Investment Plummets Amid US-China Trade War... Bilateral Investment Drops 16.2% in First Half of the Year

US-China FDI and Other Investments Total Only $10.9 Billion in First Half of This Year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Naju-seok] The scale of investment between the United States and China has fallen to its lowest level in 10 years. The investment volume sharply declined due to the impact of the novel coronavirus disease (COVID-19) and the US-China trade conflict.

According to an analysis by research firm Rhodium Group on the 16th (local time), the capital investment volume between the US and China from January to June this year was $10.9 billion (128.075 trillion KRW). This represents a 16.2% decrease compared to the same period last year. Considering that the semiannual capital investment volume between the two countries once approached $37 billion, this is a significant cooling.

This report combines direct investments (FDI) and venture capital investments made by US and Chinese companies in each other.

One of the main reasons for the sharp decline in investment is the sanctions imposed by former US President Donald Trump on Chinese companies for security reasons. Companies such as telecommunications equipment firm Huawei and ByteDance, the parent company of video-sharing service TikTok, have faced direct sanctions or threats of sanctions.

Investment by US companies in China decreased by 31% from last year to $4.1 billion. On the other hand, Chinese investment in the US increased by 38% to $4.7 billion. However, this was largely due to Chinese internet company Tencent acquiring a stake in Universal Music for $3.4 billion.

Steven Olin, chairman of the US-China Relations National Committee, pointed out, "The two countries are now moving toward decoupling," adding, "US-China relations are experiencing their worst period since 1970, including the Tiananmen incident in 1989."

This content was produced with the assistance of AI translation services.