The United States Is Butting Into Chinese Investments In Domestic Interests – But Why?

In late Jan. 2018, United States President Donald Trump launched a tariff on solar panels of 30 percent. Although it wasn’t levied at China specifically, it effectively targeted China, the world’s leading producer of solar panels. At the same time, President Trump announced a tariff of 20 percent on the first 1.2 million washing machines imported by entities in the United States. China was – and still is – a leading exporter of washing machines to both the United States and the rest of the world.

In March 2018, Trump placed tariffs of 25 percent and 10 percent on steel and aluminum, respectively. Later that month, President Trump enacted tariffs on more than 1,300 classes of goods – not just 1,300 individual types of products, but 1,300 entire classes of goods, such as flat-screen televisions, satellites, and medical equipment.

In April 2018, China responded with its own class of tariffs, all of which were to be levied against the United States specifically.

Ever since then, businesses have acted in ways that minimize the harm done to their operations related to the tariffs.

Sinovation Ventures of China Has Halted its U.S. Investments

One of the most recent such actions was taken by Sinovation Ventures, also known as Sinovation, a Chinese venture capital firm led by a former president of Google’s Chinese operations, Mr. Kai-Fu Lee.

Lee initially launched several investments in interests throughout the United States through Sinovation Ventures, primarily tech companies in California’s Silicon Valley, in 2013. However, Lee recently withdrew those investments in favor of Chinese interests.

Around the same time that Sinovation Ventures withdrew the U.S.-based investments, the executive of the firm’s office in Silicon Valley, Chris Evdemon, left his position, citing concerns that he’d lose his jobs as a result of the venture capital firm’s growing fondness of investing within its home country of China.

Sinovation Isn’t the Only Such Firm, However

Many other investments from Chinese interests are slated to be halted in coming weeks and months due to intervention by the United States government. The Committee on Foreign Investment in the United States, an agency within the U.S. Department of Treasury that is also known as CFIUS, recently deepened its involvement in the scrutiny of Chinese investments in the United States, getting in the way of pending and proposed investment deals stemming from Chinese firms that had planned on investing in the United States.

The U.S. Government Has Stifled Potential Chinese Investment Long Before Now, Too

President Donald Trump has openly voiced his opinions on trade relations between the United States and China since before he took office. After he became President in Jan. 2017, CFIUS butted in the way of the proposed acquisition of AppLovin, a United States-based tech company, by a Chinese private equity interest for a reported $1.4 billion.

Another major acquisition, that of the healthcare technology company PatientsLikeMe, was stifled as a result of the United States government’s intervention.

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