The Blubber

China’s state-backed investment funds are scaling back their involvement with U.S.-based private capital firms as trade tensions between the world’s two largest economies continue to escalate, the Financial Times reported on Monday.

According to the report, which cites seven private equity executives familiar with the situation, some Chinese funds are also requesting to be excluded from any U.S.-focused investments made by non-U.S. private equity firms.

Several buyout executives indicated that they would no longer be making new fund commitments to U.S. firms, and in some cases, have pulled out of planned allocations where no final commitment had yet been made, the FT said.

The shift comes amid rising pressure from Beijing, as U.S. President Donald Trump intensifies his trade offensive against China, raising tariffs on Chinese imports to 145%. In response, China has imposed 125% duties on U.S. goods.

Three sources cited in the report confirmed that the pullback is a direct result of guidance from the Chinese government.

The FT noted that China Investment Corporation (CIC), which launched a private equity “partnership fund” with Goldman Sachs during Trump’s first term, is among the Chinese institutions stepping away from such investments.

Other U.S. firms that have previously received capital from Chinese state-backed investors include Global Infrastructure Partners (acquired by BlackRock last year), Thoma Bravo, Vista Equity Partners, Carlyle, and Blackstone, according to the report.