Chinese foreign investment in the US, particularly in sensitive sectors, has grown significantly in recent years – totaling 38.25 USD in 2021, for example.
At the same time, Chinese companies and investors have seen a rise in political hurdles to doing business in the US in the form of sanctions, limitations on public listings, and a rise in state-level challenges to ownership and use of real estate.
The policy concerns
As the American Enterprise Institute and Heritage Foundation outline, the policy concerns around Chinese investment in the US is that ultimately all Chinese enterprises are seen to be answerable to the Chinese Communist Party.
They see a ban on Chinese enterprises as unnecessary but see some restrictions as important. And this likely reflects the general consensus among US policy makers – whether at the federal, state or local levels. And this situation points to where there is an opportunity for Chinese companies and investors in the US: To work to establish common ground with US policymakers and secure a thriving presence in the US market.
What can be done
Chinese investors and corporate leaders can seek to constructively engage with US federal, state and local officials to find common ground. But to do so effectively, a governmental relations strategy should be developed with the assistance of experts with experience in these types of initiatives. These engagement efforts, if designed and implemented properly, have a strong possibility of yielding positive results.
An example of a recent China-US accord reached around these issues — which may have involved US governmental relations counsel — is the agreement to allow complete access by Chinese companies to US stock exchanges. This is a positive outcome, and probably resulted from much informed negotiation. Importantly, it is also an example of what successes Chinese companies can have in the US — with good advice and guidance.
I help foreign companies and investors secure governmental relations counsel in the US. If you need assistance navigating the US political and regulatory environment, please contact me to arrange a discussion.