Chinese Businesses Retract From US Market Amid Intensifying Trade Tensions: 'We Were Liked By Everybody But, Then, We Became The Skunk'

Chinese businesses are reducing their presence in the U.S. due to escalating trade conflicts between the two economic superpowers.

Chinese investments in the U.S. fell sharply to $2.5 billion last year, marking the lowest level in over a decade, reported the Financial Times. This is a steep decline from the record $48 billion in 2016, based on an analysis by the Rhodium Group.

Furthermore, the activities of existing Chinese companies in the U.S. have also dwindled, indicating a challenging environment for Chinese investors. “Being concerned about China has become a real bipartisan issue upon which almost everybody can agree, rightly or wrongly,” commented Adam Smith, a partner at law firm Gibson Dunn.

"We used to be a panda…We were liked by everybody but, then, we became the skunk, and people are afraid of getting close to you," says Pin Ni, president of Wanxiang America.

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A survey by the China General Chamber of Commerce revealed that over 80% of Chinese firms cite the stalemate in bilateral relations as a key challenge. More than a third voiced concerns over unstable U.S. foreign investment policies.

Stricter U.S. policies, including former president Donald Trump‘s tariffs on Chinese goods and successor Joe Biden’s investment bans in strategic sectors, coupled with domestic subsidies, have amplified the challenges for Chinese businesses.

State governments are also tightening the reins on foreign investment. Around 36 states have proposed laws restricting foreign land ownership, a significant increase from 12 proposals last year. Primarily targeting China, 24 states have already enacted bans, according to the National Agricultural Law Center.

As trade tensions continue to mount, experts and business leaders caution against potential adverse impacts on the U.S. and global trade, while civil rights activists express concerns over potential discrimination against Chinese citizens.

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