2021年美中双向投资趋势报告（英）-美中关系全国委员会-2021.5-39页_932kb

2021 US-China Investment Trends Summary

Core Content

This report, Two-Way Street: 2021 Update, provides a detailed analysis of investment trends between the United States and China in 2020, highlighting the impact of the pandemic and evolving policy environments on both direct and venture capital (VC) flows.

Key Findings

1. Foreign Direct Investment (FDI)

• Overall Decline: Two-way FDI between the US and China fell to $15.9 billion in 2020, the lowest since 2009, due to pandemic-related disruptions and rising geopolitical tensions.

• US FDI in China:

  • $8.7 billion in 2020, a 33% drop from 2019, the lowest since 2004.
  • Greenfield investments saw a rebound in the second half of 2020 as China's economy stabilized and restrictions eased.
  • US firms focused on automotive, food, entertainment, and basic materials sectors.
  • Notable projects included Ford Blue Mach Technology in Nanjing ($500 million) and Core Source Semiconductor in Hebei ($337 million).
  • Geographic Distribution: Most investments were concentrated in coastal cities such as Shanghai, Zhejiang, and Fujian.

• Chinese FDI in the US:

  • Reached $7.2 billion in 2020, a slight increase from $6.3 billion in 2019.
  • Driven by a few large acquisitions, such as Tencent's investment in Universal Music Group and Harbin Pharmaceutical Group's purchase of GNC Holdings.
  • M&A activity remained low, with most transactions in consumer-oriented sectors.
  • Greenfield investments saw no meaningful increase.

2. Venture Capital (VC) Investment

• Overall Decline: Two-way VC flows also declined in 2020, with Chinese VC in the US increasing to $3.2 billion, surpassing the reverse flow for the first time.
• US VC in China:
  • Dropped to $2.5 billion, the lowest since 2016.
  • The most common sectors were Financial and Business Services and Health, Pharmaceuticals and Biotech, with 54 and 52 transactions, respectively.
  • Consumer Products and Services saw a decline from 52 to 31 transactions.
  • The 2017-2018 boom was driven by the growth of China's technology market, but a slowdown in the Chinese VC market occurred in 2019 due to economic uncertainty and overvaluation concerns.

3. Outlook and Policy Implications

• Post-Pandemic Recovery: The rebound in FDI is expected as economies recover, but policy developments in both the US and China remain a wild card.
• China's Policy Landscape:
  • Emphasis on domestic stability has limited outbound investment, despite a large trade surplus.
  • "Dual Circulation" strategy and industrial policies aim to reduce reliance on foreign technology, potentially discouraging FDI.
  • Portfolio investment may become more attractive for foreign investors in certain sectors.
• US Policy Landscape:
  • The Biden administration is expected to maintain key restrictive policies, including FIRRMA and ECRA, but may adopt a more transparent and less discriminatory approach.
  • Supply chain safety and antitrust policies are likely to affect Chinese companies and investors.
• Geopolitical Dynamics:
  • A new US administration may lead to more coordinated actions with allies on investment screening, export controls, and human rights.
  • Increased transparency and predictability in national security-related concerns could support non-sensitive investment.
  • Market convergence may lead to a rethinking of investment strategies.

Main Points

• The US-China investment relationship has become more complex and volatile due to the pandemic and geopolitical tensions.
• FDI and VC flows both declined in 2020, with Chinese FDI in the US slightly increasing and US FDI in China dropping sharply.
• Geopolitical factors and regulatory changes are key determinants of the future investment environment.
• China's "Dual Circulation" strategy and US policies like FIRRMA are shaping the direction of investment flows.
• Transparency and data-driven policy are essential for managing the evolving US-China investment landscape.

Key Information

• The report is produced by the US-China Investment Project, a collaboration between the National Committee on US-China Relations and Rhodium Group.
• The data used is based on an alternative dataset by Rhodium Group, which tracks individual FDI transactions rather than relying on Balance of Payments (BOP) data.
• Interactive data visualizations and detailed datasets are available at www.us-china-investment.org.
• Market access remains a key concern for US firms in China, with only 24% feeling a clear positive impact from the Foreign Investment Law.
• Long-term challenges such as demographics, debt levels, and supply chain diversification are expected to influence future investment decisions.

Conclusion

The 2021 report underscores the complexity and volatility of US-China investment relations, highlighting the need for transparency and data-driven policy. While the post-pandemic recovery may lead to a rebound in investment flows, the geopolitical climate and regulatory environments in both countries will significantly shape the future of these flows.