In the context of the Sino -US trade war, the United States restricts the negative effects of China's negative effects on direct investment in the United States and venture capital.On January 20 this year, the United Nations Trade Conference issued a report stating that China -US two -way foreign direct investment zero growth in 2019.The significance of Chinese direct investment and venture capital in the United States far exceeds that of Chinese cargo products exported to the United States.These investments are connected to high -tech. The United States is the most important external source of high -tech China in China. High -tech supports the strength of the economic and military fields of a country.
The reason why the United States restricts China ’s investment is that the United States no longer trust China.On October 30, 2019, US Secretary of State Pompeo said: We finally realized that the Communist Party is hostile to the United States and us.
In August 2018, the U.S. Congress passed the Foreign Investment Risk Evaluation Modernization Act (Firrma), which is the iconic incident that the United States restricts China ’s investment in the United States.Although the bill has no specific country, it is not difficult to understand that the bill is targeted at China based on its background.On November 8, 2017, some members of the United States pointed out in the parallel of the House of Representatives in parallel to the House of Representatives that the bill was proposed to a certain extent for China's investment in the United States in the United States.
The core of Firrma is to expand the scope of transactions that can be reviewed by the US Foreign Investment Commission (CFIUS) to more effectively solve the US national security issues.What is the national security issue?FIRRMA has identified six considerations, including key infrastructure for the Foreign Investment Commission.In fact, these considerations depend more on the free decline of foreign investment committees.
Foreign investment members have the right to review the entry of foreign direct investment and venture capital.Raising the Banner of Marxist Banner is naturally the largest security threat in the United States.No matter how China talks about the United States, it does not help the United States, and the effect of China's rise is objective.The United States clearly regards China as challengers in various aspects such as economy, military, technology, and ideology. It is determined that Chinese companies to acquire technology in the United States will threaten the future of the United States, which will inevitably cause the United States to prevent potential Chinese capital from entering the United States.
The United States restricts China's investment in negative effects: First, China's investment in the United States has declined.The United States has stepped up to restrict China's investment. In 2017, the Chinese government measures to suppress irrational foreign investment were the reasons why China's investment in the United States declined in 2018.According to data from Rongding Consulting Company, in 2016, China's direct investment in the United States reached a peak of US $ 46.5 billion (about 64.1 billion yuan), fell to US $ 29.7 billion in 2017, fell to US $ 5.4 billion in 2018, and fell again in 2019 to drop again.To $ 3.1 billion.
Rong Ding's research report believes that the activities of Chinese state -owned risk capital in the United States have dropped sharply. From 15 to 25 transactions in the past 6 months to less than 10 in the first half of 2019.In 2018, China's foreign direct investment in the United States was US $ 140.5 billion, and foreign direct investment in China in China was US $ 269.6 billion.In 2018, the financing of Chinese companies in the US stock market also declined.
According to DEALOGIC data, the number of Chinese companies newly landed on the Nasdaq and the New York Stock Exchange in 2019 decreased from 33 in 2018 to 25, but the total financing of these transactions has fallen from US $ 9.2 billion in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sharp drop to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to a sudden drop in 2018 to$ 3.4 billion.Many Chinese companies have been forced to reduce their valuations and rely on existing investors to complete the first public stock sales plan (IPO).
Second, it hinders China from obtaining technology from the United States.The United States is the most open economy in developed countries. Foreign investors, including investors from China, can invest in the latest and most related technologies, and obtain experience in these technologies at the same speed as the United States.According to the data of the Rongding Research Report: From 2006 to 2016, China ’s total investment in the United States' electronics, information and communication technology, biotechnology and energy sources was US $ 35 billion, only $ 8.5 billion in 2016.China's investment in the field of technology in the United States has both commercial interests and driven by China's national strategic goals.
China's investment in the fields of artificial intelligence, virtual reality, robotics and fintech in the United States is very active.In 2015, China ’s investment in these areas accounted for about 20%of investment in the United States and increased to 40%in 2016.From 2010 to 2017, Chinese investors participated in 81 artificial intelligence venture capital in the United States with a total investment of about 1.3 billion US dollars; it provided nearly $ 237 million in venture capital in the field of robotics;Risk capital of $ 2.1 billion; risk capital invested in the financial technology field (including blockchain technology) is 3.5 billion US dollars.
The combination of Chinese capital and American technology has promoted China's technological progress.The facts you see are: Chinese quantum communication satellites, the light of the sun, the light of the sun, artificial intelligence cruise missile, DJI drone.The West has recognized that China is no longer a follower who imitates Western technology, and now it has innovated in many fields.There is no doubt that in the context of the United States' highly alertness of the integration of Chinese military and civilians, the US Foreign Investment Commission has strictly controlled Chinese investors to invest in many sensitive technical investment with the characteristics of military and civilian use.
Third, Western countries follow the United States to restrict Chinese investment.After the United States introduced Firrma, Western countries have also joined the ranks of restricting China's investment.In May 2018, Canada prevented a Chinese state -owned company from acquiring a construction company's transaction for $ 1 billion on the grounds of national security concerns.In July 2018, the British government announced policy documents to enhance the power of the British government to prevent foreign investment from acquiring the power of safe and sensitive British assets.
In July 2018, the German government decided to prevent China ’s State -owned Enterprise State Grid Corporation in the German power grid operator 50 Hertz (50 Hertz) on the grounds of national security.In February 2019, the European Parliament passed the foreign investment review method.The bill did not directly name China, but mentioned the investment and technology transfer of foreign state -owned enterprises.On October 30, Israeli established a foreign -funded admission consultant committee to strengthen investment supervision.
The United States has a demonstration effect on the decoupling of Chinese investment.According to the UN Trade Conference, many countries tightened their investment censorship due to security concerns.Nearly 12%of the world's direct investment in 2018 was blocked by governments from various countries.In 2019, the UK announced a 120 -page policy report to enhance the government's power and prevent foreign investment from acquiring British assets to trigger hidden dangers of national security.Britain is mainly targeted at investors from China and Russia.Although China and the United States signed the first phase of economic and trade agreement, the United States did not show no signs of restrictions from China.
(The author is a professor of economics at Shanghai Normal University Business School)
