A Study On The Impact Of The Trump Administration’s Economic Policies On China’s Direct Investment In The United States

Since China’s accession to the WTO,China’s foreign direct investment has developed rapidly,and the United States has gradually become an important destination for foreign direct investment in China.However,in 2016-2017,China’s direct investment flows to the United States have fallen sharply,in part because of the impact of economic policy adopted by US President Trump since taking office.At the beginning of Trump’s appointment,he launched a "301 investigation" on China and formulated economic and trade measures against China based on the results.In the middle of 2018,Sino-US trade frictions has been further upgraded.At the same time,the 2018 Foreign Investment Risk Review Modernization Act has been adopted.The North American Free Trade Agreement has been renegotiated,weakening the Investor-State Dispute Settlement mechanism.In response to the hollowing out of the US domestic industry,Trump implemented a tax reform,passed the Tax Cuts and Jobs Act.The adjustment of these economic policies affects China’s direct investment in the United States from both direct and indirect paths.Strengthening the national security review of foreign investment has created a major direct obstacle to China’s direct investment in the United States,and weakening the Investor-State Dispute Settlement mechanism will indirectly hinder China’s direct investment in the United States.However,the increase in the attractiveness of US domestic assets brought about by tax reforms is conditional in the long run,and thus the promotion of China’s direct investment in the United States is also indirect.In the face of US policy adjustments,Chinese enterprises should actively cooperate with their foreign investment review.At the same time,the government should actively restart negotiations on high-standard bilateral investment agreements with the United States,and at the same time improve foreign direct investment supervision policies to safeguard the interests of Chinese enterprises overseas and improve the efficiency of foreign investment.