Trade War with China Hurts Domestic Markets

China, Trade War, Trade Wars

The so-called “Trade War” with China has hurt the amount of Foreign Direct Investment directed at the U.S. from Chinese sources over the past couple of years. Ever since Trump was elected, Chinese investment has dropped by almost 90%. This affected almost all facets of the American economy.
Trump has placed greater regulatory scrutiny on Chinese companies operating in the United States. Simultaneously, the Chinese government has made an effort to lower foreign spending. This has affected fintech start-ups, real estate markets, and tourism across the United States.
Eswar Prasad, a former official at the International Monetary Fund, felt that this reflects the deterioration of the relationship between the States and China.
The U.S. had been the recipient of rampant Chinese spending for over a decade. This spending has aided the U.S. economy. To put matters into perspective, in 2016, Chinese investment was valued at around $46.5 billion. In 2018, this number dropped to $5.4 billion.
It is important to note that there is no sole cause behind this drastic change. One cannot only blame Trump’s foreign policy. In China, the economy has slowed and there have been more regulatory measures implemented to halt foreign spending. Trump’s efforts at calling for higher tariffs and higher regulation on Chinese good has not aided the matter. Business in both countries has been negatively affected.
Many real estate companies are fearing the worst. The large influx of Chinese capital had led to a boom in the real estate market of many urban areas across America. This includes New York City, San Francisco, and Los Angeles. This has led to “disposal activity” by new owners of commercial and residential real estate.
Apart from the real estate market, the tech market has been severely affected. For example, the Huawei case that made international headlines.
To read more about the ongoing “Trade War”, check out the original here.

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