Chinese firms in the US worried about Trump, but it won’t impact their investment strategies: survey

Bank of China USA CEO blames “reasonable” capital controls for drop in Chinese investment

Bank of China's CEO Xu Chen
Bank of China's CEO Xu Chen

Chinese businesses in the U.S. are concerned the Trump administration could make their lives harder, according to a new survey by the China General Chamber of Commerce U.S.A.

Sixty-three percent of respondents said they expect government oversight of mergers and acquisitions involving Chinese firms will be tightened under Trump, and 53 percent said they expect tightened government oversight of their activities more generally.

CGCC’s survey is based on responses from 213 Chinese firms in the U.S. collected in March across various business lines. Chinese firms have emerged as highly active New York real estate investors in recent years, and their sentiment matters to the market.

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At a media event Thursday, Xu Chen, CEO of Bank of China USA and CGCC chair, said U.S.-China relations were “at a crossroads” following Trump’s election victory, but also argued that increased U.S. regulatory pressure on Chinese firms is unlikely to change investment strategies. In the survey, 83 percent of respondents said the election will have no impact on their U.S. investments.

Asked which potential Trump policies most concern them, 53 percent of respondents pointed to foreign policy over the South China Sea and another 53 percent named import taxes on Chinese goods, while 46 percent were concerned about immigration policies.

Xu pointed out that Chinese investment in U.S. real estate decreased in the first half of 2017 and argued that “the primary reason is a tightening of the foreign exchange control authority of China.” The Real Deal recently broke down how capital controls implemented since November have made it harder for Chinese firms and individuals to invest in New York.

Xu called the capital controls “reasonable,” in part because Chinese investment overseas (much of it in U.S. real estate) had “eroded” China’s foreign exchange reserves. He added that new restrictions on capital outflows of more than $50,000, along with increased regulatory scrutiny in the U.S., could make it more difficult for developers to raise money through the EB-5 cash-for-visa program.