(Source: "International Business Daily" 2025-02-26)
On February 21, Eastern Time, U.S. President Trump signed the "America First Investment Policy" memorandum. The memorandum related to China's investment in the United States mainly includes two items: First, restricting the investment in the United States by third-country companies related to China. The second is to restrict China’s direct investment in key areas of the United States. In addition, the memorandum welcomes investments from U.S. allies in the United States, but they cannot cooperate with "foreign rivals."
The U.S. government’s measures to strengthen restrictions on China’s investment in the U.S. are a continuation of the investment protectionist actions taken by Trump during his first administration. In August 2018, the Foreign Investment Risk Review Modernization Act (FIRRMA) signed by Trump has a strong intention to review and restrict China’s direct investment in the United States. It clearly proposes the concept of “countries of special concern” and adds specific requirements for “China Special Report”. Against this background, the flow and industry distribution of my country's investment in the United States have undergone significant changes in recent years.From the perspective of traffic, China's direct investment in the United States fell by nearly 50% year-on-year in 2019, less than a quarter of what it was before Trump first came to power. Although it increased by 2023, it did not return to the 2016 level. A large number of Chinese-funded companies were forced to withdraw or cancel transactions before submitting them to the United States for review, resulting in a significant increase in the number of cases that were not approved.From the perspective of industry distribution, due to the special provisions of the FIRRMA Act on critical infrastructure, key technologies, and sensitive personal information, Chinese investors have to turn to other fields. The proportion of investment flows in the U.S. manufacturing industry in 2023 dropped from 35.3% in 2016 to 17.8%, and the information transmission, software and information technology services industry dropped from 29% to 3.9%. However, the scientific research and technology services industry achieved slight growth, increasing from 7.2% to 11.9%.
So, compared to FIRRMA, the "America First Investment Memorandum" not only imposes substantial investment restrictions in a more targeted manner, but also generalizes so-called key areas. In this situation, this memorandum may have the following impact:First, broader investment restrictions will reduce domestic employment opportunities in the United States and weaken the vitality of the U.S. economy.Foreign investment is a critical source that supports U.S. jobs, innovation and economic growth. As far as China is concerned, by the end of 2023, Chinese companies had established more than 5,100 companies in the United States, employing more than 85,000 foreign employees. If combined with the job creation driven by other countries' investment in the United States, this investment restriction will directly cause a reduction in domestic jobs in the United States.Second, investment restrictions in emerging fields will hinder global technological cooperation and destroy the global innovation ecosystem.In recent years, Chinese companies have made significant technological breakthroughs in fields such as artificial intelligence, quantum computing, and 5G communications, and are the core force leading the development of global science and technology. U.S. investment restrictions on China in key areas will hinder Sino-U.S. technological cooperation, which will not only harm the technological competitiveness of U.S. companies, but will also have a negative impact on the global innovation ecosystem.Third, interference in the normal investment activities of enterprises will distort the global investment pattern and accelerate the in-depth reconstruction of industrial and supply chains.In order to avoid the increasing scrutiny risk in the United States, companies may reduce investment in the United States, diversify investment risks through diversification, and transfer production, R&D, and supply chains to countries with more relaxed regulatory environments and more transparent and stable policies. This will lead to in-depth adjustments and accelerated reconstruction of global industrial and supply chains.
To sum up, the "America First Investment Policy" memorandum is a typical manifestation of the generalization of investment protectionism and national security in the United States. It is a hegemonic act that interferes with the normal investment activities of enterprises and is not conducive to the development of both China and the United States and the global economy. At present, the global economic growth is slowing down and full of uncertainties. Only by adhering to open cooperation and win-win cooperation can global challenges be solved.
Attachment：Original link
https://mp.weixin.qq.com/s/1f_XTynSsuOGxkSUxmR0ww
