America’s trade war against China has so far failed to achieve its objective. This is evident from the latest data released here. They conclude that US investment in China is actually increasing. Overall, China’s economy has grown in relation to the rest of the world in recent months. Whereas the purpose of the trade war of Donald Trump administration has been to isolate China.
China has increased its investment in technology and research and development (R&D). As a result, there has been a huge increase in foreign direct investment (FDI) in the country. Significantly, China has recently increased investment in invention-focused development to achieve self-reliance in the technology sector in a planned manner.
According to China’s Ministry of Commerce, October was the seventh consecutive month when FDI in China increased. Last month, total foreign investment came to $ 12.4 billion, an increase of 18.3 percent over September. In the first quarter of this year, there was a huge drop in FDI due to the corona epidemic. Nevertheless, FDI inflows into China have increased by 6.4 per cent in the last ten months. The highest growth has been seen in the high tech industry. In October, it saw a growth of 27.8 percent compared to the same month of the previous year. The performance of the research and development sector has been even better.
Analysts say US investors continue to invest in China. China has now formulated a development policy aimed at increasing consumption in its domestic market. It is clear that foreign investors do not want to stay away from potential profits in this market. According to UK financial data company- Mergermarket, American investors are investing their money to buy stakes in companies already in China. Between January and October this year, he invested about $ 11.35 billion in acquiring or merging companies. This is 69 percent higher than the same period last year. According to Mergermarket, this means that instead of breaking ties, American investors are strengthening their relationship with China.
Louis Kuzis, head of the Oxford-based Asia Economics Unit, says it is difficult for the US government to instruct its companies not to invest in China. So while the government is going in the direction of reducing the relationship, companies are increasing the relationship. DBS Bank chief economist Timur Baig told the Hong Kong newspaper South China Morning Post that US investment in China had increased by 26 per cent in the last five years. Recent events have not affected this trend.
While such reports have been very popular in the media that American and European investors have serious complaints about the behavior in China. They object to the fact that special subsidies are given to government companies in China. At the same time, foreign companies do not get open exemption to do business in every part of the country. In the Internet, entertainment and telecommunications sectors, China has largely controlled the business. It is clear that despite this, these companies are not stopping their investment in China.
Before the US and Chinese trade war began, there were reports that American and European companies were planning to move their factories from China to elsewhere. She wanted to do this so that dependence on China could be reduced in terms of supply chain. But after the Corona epidemic, while the rest of the world’s economies are in crisis, China has achieved rapid growth. Meanwhile, China has decided to liberalize many parts of its economy, especially in the financial sector. According to experts, American companies did not want to stay away from the opportunities made by it. So they have increased their investment in China. And thus the Trump administration’s policy of punishing China seems to be failing.