The Impact of China-US Trade Conflict on Foreign Investment in China

Abstract

The trade war between China and the United States, as the two largest global economies, has had a profound impact on both countries. However, China, being a developing nation that has attracted significant interest from investment companies worldwide, has been particularly affected by this conflict. The trade war has presented numerous challenges for companies looking to invest in China, but there have been notable improvements in recent years. This study aims to delve into the examination of the influence of objective changes and subjective changes experienced by investors on the ultimate outcomes of their investments. By analyzing both the tangible and intangible factors affecting investment decisions and outcomes, a comprehensive understanding of the trade war's impact on investment in China can be gained. Objective changes refer to the concrete alterations in trade policies, tariffs, and regulations that have been implemented as a result of the trade war. These changes may include increased tariffs on certain products, revised import and export regulations, or modifications to investment laws. These objective changes can directly impact the costs, profitability, and feasibility of investments in China. On the other hand, subjective changes pertain to the perceptions, attitudes, and sentiments of investors toward investing in China amid the trade war. These subjective changes can be influenced by factors such as geopolitical tensions, market uncertainty, and the perceived risks associated with investing in a country engaged in a trade war.