A housing project under construction in Shenyang, Northeast China's Liaoning Province on Monday. The National Bureau of Statistics said that from January to April, national real estate development investment was 4.02 trillion yuan ($624 billion), a year-on-year increase of 21.6 percent. Photo: cnsphoto

 

Two- way investment between China and the US fell to $15.9 billion in 2020 amid pandemic and rising tensions within the China-US relationship, the lowest level for two-way flows since 2009, according to a report issued on Wednesday by Rhodium Group and the National Committee on US-China Relations (NCUSCR).

US FDI in China dropped to $8.7 billion in 2020, down nearly 30 percent from the previous year to the lowest level since 2004, according to the report said.

The drop was exacerbated by the pandemic in the first half of the year but recovered strongly in the second half as China's economy stabilized and COVID-19 related restrictions eased. Compared to previous years, US investors have slowed down in acquisitions with only a handful of medium-sized takeovers in consumer products and financial services, the report said.

Chinese investment to the US, on the other hand inched up slightly, to reach $7.2 billion in 2020 from the $6.3 billion in 2019. However, the figure remained far below the more than $45 billion China invested in the US in the peak of 2016.

The sharp drop in two-way investment is a result of a deteriorating policy environment fermented by the Trump administration, Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Thursday.

"The US has been seeking to decouple with China since president Trump took the office, which reached a peak in 2020 and was exacerbated by the pandemic and US' crackdown on Chinese enterprises' acquisition of American enterprises," Dong said.

As the economy of China and US has rebounded from the pandemic, the investment between the two countries is expected to bounce back, Dong said.