Chinese Investments in the United States in the Context of U.S.–China Rivalry

In the context of escalating U.S.–China tensions, China's technological breakthrough, the huge negative balance of bilateral trade, and the growth of Chinese investments abroad are of particular concern to the United States. Washington views China's transformation into one of the world's leading capital exporters as a serious threat. The export of foreign direct investments allows China to access advanced technologies, gain control over strategically important mineral reserves and infrastructure projects in other countries, and strengthen its political influence in various regions of the world. Regarding Chinese capital exports to the United States, the growing rivalry between Washington and Beijing is reflected in several key trends. First, there has been a sharp reduction in Chinese investments in American government securities, as China's trust in them has been undermined. Second, there is a gradual decrease in Chinese direct investment in the United States. On the one hand, this results from Washington's treats investments from China with growing suspicion and is increasingly inclined to restrict them for reasons of national security. On the other hand, these investments are becoming less attractive for the Chinese government and investors due to increased political risks. All this taken together, along with the decline in China's share in American foreign trade, indicates a fairly intensive process of decoupling of the American and Chinese economies. In addition, with regard to investments from China, the United States seeks to extend its jurisdiction to third countries, preventing expansion of Chinese capital abroad, especially in such areas as high technology, mining of critical minerals and infrastructure.

USA, China, investments, direct investments, FDI, portfolio investments, treasury bills, decoupling