China is tightening control over its companies' investments in the United States. As a result, businesses now face delays in getting approvals. This move appears to be a direct response to rising trade pressure from Washington.

Beijing Slows Investment Approvals

Recently, China ordered officials to slow down approvals for businesses planning to invest in the US. According to Bloomberg, several branches of the National Development and Reform Commission (NDRC) received these instructions. Consequently, companies now struggle to move funds abroad.

Decline in US Investments

Notably, Chinese investments in the US dropped to $6.9 billion in 2023. This marks a 5.2% decline from the previous year. In contrast, China’s global foreign investments grew by 8.7%. As a result, the US now accounts for only 2.8% of China’s total overseas investments.

Although China has not targeted existing corporate holdings or US Treasury assets, its latest move still creates uncertainty. Moreover, businesses trying to expand in the US now face additional hurdles. Those relocating production from China to bypass US tariffs will also encounter obstacles.

Growing Trade Barriers Between the US and China

Previously, China limited foreign investments due to national security concerns. However, this time, the restrictions align with escalating trade tensions.

Meanwhile, US President Donald Trump recently announced “reciprocal tariffs,” further straining relations. His proposal imposes at least a 54% tariff on several Chinese imports. Furthermore, in February, the White House instructed a key government committee to restrict Chinese investments in critical sectors like technology and energy.

As both nations tighten restrictions, their trade relationship becomes even more uncertain.