China has moved to restrict domestic companies from making new investments in the United States, according to people familiar with the matter—a decision seen by some as a strategic move to gain leverage in future trade negotiations with the Trump administration.
Multiple regional offices of the National Development and Reform Commission (NDRC), China’s top economic planning body, have been instructed in recent weeks to delay or suspend the registration and approval process for firms aiming to invest in the U.S., the sources said, speaking anonymously due to the sensitivity of the issue.
Although China has previously imposed limits on overseas investments to address national security risks and control capital outflows, this latest action reflects the growing strain between the world’s two largest economies as President Donald Trump escalates tariffs. According to the most recent data, Chinese outbound investment into the U.S. totaled $6.9 billion in 2023.
The sources noted there has been no indication that China’s existing investments in the U.S.—including ongoing business operations and holdings of U.S. financial assets like Treasuries—will be impacted by the move. However, it remains unclear why the NDRC decided to halt the approvals, or how long the pause will continue.
Both the NDRC and the Ministry of Commerce, which share oversight of outbound foreign investment, did not immediately respond to Bloomberg’s request for comment.
U.S. equity futures dipped to session lows following the report, and European markets also extended their losses.
North America Sees Steep Drop in Chinese Investment
Chinese investment into North America fell sharply in the final quarter of 2023, hitting its lowest level in at least five years, according to data from Rhodium Group.
President Trump is expected to unveil a new round of so-called “reciprocal tariffs” on Wednesday, potentially targeting China. A February memorandum issued by Trump called for a key interagency committee to further limit Chinese investment in strategic U.S. sectors such as technology and energy.
China, meanwhile, has been tightening oversight of outbound investments following a surge in capital outflows that put pressure on the yuan, Bloomberg previously reported.
While the new restrictions are largely focused on corporate investment in the U.S., the move adds an additional layer of uncertainty for Chinese companies attempting to shift production abroad to work around mounting trade barriers and navigate an increasingly volatile global environment.
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