According to Bloomberg, China has recently ordered its top economic agency, the National Development and Reform Commission (NDRC), to pause the approval process for companies looking to invest in the US. This change affects new investment applications but not existing deals.
The reason behind this move is not clear, but it’s seen as a possible strategy to gain more bargaining power in upcoming trade talks with the US.
Trade Tensions with the US Escalate
This action comes as US President Donald Trump prepares to announce new tariffs on US trade partners, including China. The US has also been working to limit Chinese investments in key sectors like technology and energy.
China’s investment in the US was around $6.9 billion in 2023, highlighting the importance of these business ties. However, with the US imposing stricter trade policies, China’s decision reflects its growing frustration and strategic response.
Impact on Global Markets
The news caused a drop in US stock futures and also affected European markets. Investors are worried about how this could affect global trade and economic stability.
Despite the restrictions, existing Chinese investments and purchases of US financial products, such as government bonds, remain unaffected.
