This is a transcript, for the video found here:
Bullets:
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US officials at the federal and state levels are passing laws to restrict Chinese firms from buying American real estate, particularly farmland.
Other restrictions involve Chinese investments in US-based companies, and attempts to “claw back” outstanding Chinese investment in the United States and across the world.
But these policies are irrelevant, as Chinese investments in the US are a tiny fraction of the profits earned there.
Typically, countries running trade surpluses will re-invest those cash flows into the country, either by lending (buying bonds) or in new capital formation.
Chinese regulators, however, are simply moving these hundreds of billions of dollars outside the US, to banks outside SWIFT. Then, they are invested here in Mainland China, or to BRI projects in friendly countries.
Report:
Good morning.
Policymakers in the United States, at the federal and state levels, are enacting laws that prevent Chinese companies from buying assets in the United States. This report from Rhodium has a good summary of the dynamic, on both sides. The US is on a mission to claw back strategic investments by China in the United States, and across the world. It’s driven by concerns involving dependency on critical industry and infrastructure, that are owned and operated by Chinese companies. And as these efforts become more pronounced in the future, we should expect China to exert tighter control over their outbound investments.
These efforts are the most apparent when it comes to farmland and real estate. There is a bill in the US Senate that will ban Chinese ownership of American farmland outright, and there is a powerful movement across individual US states to do the same for all land holdings. Two thirds of US states either have laws on the books now, or are considering them, which will restrict foreign ownership of land in their states, with China specifically mentioned.
The obvious question is how much land Chinese companies actually do own in the United States, and – it’s not much. Add up all the land that is owned by all foreigners across the US, and China is less than 1% of that. China’s total land holdings in the US is equal to two New York Cities, while Canada owns the equivalent of two US states—Vermont plus New Hampshire. Those aren’t big states, but the point is that China’s ownership of US land is tiny. China is dwarfed by Portugal. The Dutch hold over twelve times more than China.
In 2024, the United States ran a $295 billion trade deficit with China. That $295 billion comes out of the US, and into bank accounts of Chinese firms that run these surpluses. Over $800 million a day. Typically, these cash flows would be reinvested back, into assets, of the country that runs trade deficits. Commonly, historically, countries that run trade surpluses, as China does, will buy a lot of bonds, lending it back. Or build new equity, by investing it back into productive capital, by opening new factories or farms. But China isn’t doing any of those things. China is famously not buying American Treasury bonds. They are sellers of US Treasuries, or at least letting them roll off at maturity and not reinvesting the proceeds of them. So we might suppose that all these rules and laws and strategies are designed to prevent China from reinvesting $800 million a day into valuable US farmland, or setting up new companies that will compete with ours.
But they’re not doing that. Rhodium Group warns us that in the future, Beijing is going to shut down Chinese investments in the United States, over coming months and years.
But that is already their policy. In Q4 2024, Chinese investment in the United States was the lowest going back five years, just $200 million for the quarter. China runs surpluses of $800 million a day in the United States—times 90 days, but only put $200 million back.
The Beijing commission responsible for approval for outbound investments has basically shut off new applications for Chinese firms who want to invest in the United States. China’s investments in the US was $6.9 billion in 2023. China’s trade surplus with the US in 2023 was $279 billion.
For companies that want approval to invest less than $300 million need to get local government approval, and aren’t subject to approval by the National Development and Reform Commission. But those approvals aren’t coming either. Provincial governments have also stopped processing applications for outbound investments. And there are manufacturing projects in motion in the US that have stopped. Chinese investments in other parts of the world are continuing, no problem, but not for the US.
Saying all this another way, in the United States there is a concerted effort by Washington and the states, to shut out inbound Chinese investments to the US. But all that is superfluous, because there is a concerted effort, in China, by Beijing and the provinces, to shut down outbound Chinese investments to the US.
Meanwhile, these billions of dollars a week in trade surpluses keeps rolling out of the United States, and to China, and it’s all got to go somewhere. In 2023, China’s outbound investment to the US was $6.9 billion.
Here are the top 10 destinations for Chinese outbound investment for 2023. China invested more than $16 billion into Saudi Arabia. Vietnam got twice as much Foreign Direct Investment from China than the United States did. Argentina got a lot more. China invested as much money into Serbia in 2023, as they put back into the United States.
In the fourth quarter of 2024, China’s outbound investment in the US was just $200 million. But to the rest of the world it was about $30 billion:
This part is all theater then. President Trump signed an order in February, the America First Investment Policy. It makes it easier for US allies to invest in the US, but much harder for China to. There will be a lot more scrutiny over investments by China, but big investments from allied countries will be green-lighted for fast approval. Regulations will be relaxed “in proportion to other countries distance and independence from China”, whatever that’s supposed to mean.
But China has already saved Trump all the trouble. China earns $800 million a day in profits in the United States, every day, all year long. Instead of keeping that money in our banks, earning interest, or setting up factories and creating jobs—China just hauls it all back here.
Their regulators would be literally crazy to do otherwise, when our top lawmakers and officials are getting elected on the promise to “claw back” investments, and just as crazy to leave it in any Western bank where it could be frozen or seized for whatever reason. So it all comes back, then their regulators look at a map of the world, and decide that Kazakhstan represents a far better risk-reward investment profile, than anything on offer from North America. Morocco is in West Africa, and Chinese officials consider Morocco a better investment, for US dollars earned in the United States by Chinese companies, than the United States itself.
Be Good.
Resources and links:
The Clawback: Reclaiming Strategic Assets from China
https://rhg.com/research/the-clawback-reclaiming-strategic-assets-from-china/
U.S.-China Goods Trade (2024): $144 Billion Exports, $439 Billion Imports, $295 Billion Deficit
Economist, Chinese firms are growing rapidly in the global south
https://www.economist.com/briefing/2024/08/01/chinese-firms-are-growing-rapidly-in-the-global-south
Nikkei, China pauses US-bound company investment amid trade war
China blocks its firms from investing in US ahead of trade war escalation
https://nypost.com/2025/04/02/business/china-blocks-its-firms-from-investing-amid-us-trade-war/
Bloomberg, China Restricts Companies From Investing in US as Tensions Rise
Trump investment order seeks to limit US-China flows, while attracting more from allies.
How Much US Land Do China and Other Countries Really Own?
https://globalaffairs.org/commentary-and-analysis/blogs/china-foreign-land-ownership-explainer
Bill bans Chinese ownership of U.S. farms and farmland
https://www.feedstuffs.com/policy/bill-bans-chinese-ownership-of-u-s-farms-and-farmland
Newsweek, US States Seek to Ban Chinese Citizens From Buying Land, Property
https://www.newsweek.com/us-states-ban-chinese-citizens-buying-land-arizona-texas-2080869
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