BEIJING, China – Amidst an escalating tariff war, China has reportedly begun restricting domestic companies from investing in the United States, a move seen as retaliation against US tariffs imposed by the Trump administration and a potential leverage point in future trade negotiations.
According to a Bloomberg report citing sources familiar with the matter, several branches of China's top economic planning agency, the National Development and Reform Commission (NDRC), have been instructed to suspend registration and approval processes for firms seeking to invest in the US.
The move follows months of heightened tensions between the two economic giants, marked by tit-for-tat tariffs. The US recently introduced an additional 10% tariff on Chinese goods and a 25% tariff on automobile imports from China and other countries. China had previously responded with a 15% tariff on US coal and liquefied natural gas.
While China has previously restricted overseas investments based on national security concerns and capital outflow control, the latest measures underscore the growing animosity between the world's two largest economies as Trump intensifies tariff pressures.
According to the latest available data, China's outbound investments into the US totaled $6.9 billion in 2023. Sources indicate that existing commitments by Chinese companies in the US and China's holdings of financial products such as US Treasuries will likely remain unaffected.
The duration and full implications of the NDRC's suspension remain unclear. Neither the NDRC nor the Ministry of Commerce, which typically oversee foreign investment approvals, have responded to requests for comment.
Following the Bloomberg report, US equity futures dropped to session lows, while European stocks extended their decline, reflecting investor anxiety over the escalating trade conflict.