American Investors Ignoring the US/China Trade War

American Investors Ignoring the US/China Trade War

Massive Investment in China from the US

China’s fast-growing local economy and consumer market is attracting investment from America with several industry leaders committing to China, despite the trade war going on between the United States and China.

In the first half of 2019, American companies invested as much as $6.8 billion into China, which is an increase of 1.5% in comparison to the same time period in the most recent two years. A large proportion of this investment was allocated to green technology projects such as the Shanghai Tesla factory. Other significant deals include a $570 million investment in Beijing Qinhuai, a data centre provider, and several large-scale construction projects scheduled over several years. Sportswear manufacturer Nike confirmed that they would increase production in China with the goal of serving the local markets.

US Companies Not Heeding President Trump’s ‘Order’

According to Ker Gibbs of the American Chamber of Commerce in China, American companies with a presence in China plan to continue investing and expanding to other Chinese cities because consumer growth in China continues to remain robust. There has been a slight decline in the worth of new projects, especially in the IT and communications industries this year, which is most likely due to the trade war, but American companies are by no means abandoning China as an investment destination. This, regardless of the US president Trump ‘ordering’ American companies to back away from China.

Making it Easier for Investors

Gibbs from the American Chamber of Commerce in China stated that the Chinese government is hospitable towards Americans and warmly welcome investments from abroad, often going out of their way to assist companies in their goals. China used to be considered as a hub for exports but production for local consumers is significantly increasing. Over 75% of China’s economic growth was a result of consumer spending. With this “in China, for China” strategy, foreign investors like Nike have a growing market.

Source:
https://www.ft.com/content/cabf76d4-c5a1-11e9-a8e9-296ca66511c9

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