China's direct investment in the United States will fall this year under tightening scrutiny and regulation but U.S. investment here will remain robust led by technology and consumer goods, a new study showed yesterday.
Chinese investment remained strong in the first half of this year, due to the completion of deals made in 2016, but it is expected to cool in the second half, said a report by Rhodium Group and the National Committee of U.S.-China Relations.
The decline marks a correction from a surge of overseas investment last year as China poured billion into the US in 2016, three times that of 2015.
Foreign direct investment from the U.S. last year was a quarter of the China-U.S. investment — but still a record. U.S. investment in China will likely hold up well as China upgrades and restructures, said Rhodium director Thilo Hanemann.
Although the U.S. and China are tightening scrutiny in the interests of national security, bilateral investment still has huge potential, given the number of projects in the pipeline.
Information communications technology was the largest sector for US investment last year.
Real estate and hospitality were the favorites for Chinese investors, triggered by regulatory changes to prevent "irrational investment" — unrelated to core business.