Chinese Investment in the US and the EU is Declining –for Similar Reasons

Jacob Kirkegaard

China & World Economy, 2020, vol. 28, issue 2, 59-83

Abstract: Since peaking in 2016, Chinese outward investment, primarily to the US but also to the European Union (EU), has declined dramatically, especially in response to changes in China's domestic rules for capital outflow. Concern over growing Chinese influence in other economies, the ascendant role of a Communist Party‐led government in Beijing and the possible security implications of Chinese dominance in the high‐tech sector have put Chinese outward investment under international scrutiny. This paper analyzes the recent trends in Chinese investment in the US and the EU and reviews recent political and regulatory changes both have adopted toward Chinese inward investment. It also explores the emerging transatlantic difference in the regulatory response to the Chinese information technology firm, Huawei. Concerned about national security and as part of the ongoing broader trade friction with China, the US has cracked down far harder on the company than the EU.

Date: 2020
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