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Investing.com -- China has imposed new restrictions on local companies seeking to invest in the US, a move that could heighten tensions between the two economic giants, according to a report from Bloomberg on Wednesday.
The report says, citing people familiar with the matter, that several branches of China’s National Development and Reform Commission (NDRC) have been instructed to halt the registration and approval of investment applications for US-bound projects.
This development comes as President Trump increases tariffs, further exacerbating the already strained trade relations between the countries.
While China has historically limited certain overseas investments for national security and capital control reasons, Bloomberg says the new action signals a deeper level of scrutiny.
They report that the restrictions do not impact existing investments, such as Chinese holdings in US Treasuries, nor are they expected to affect Chinese firms’ ongoing operations in the US.
The move comes ahead of Trump’s planned announcement on Wednesday regarding reciprocal tariffs, which are likely to also target China.
The uncertainty surrounding the restrictions could complicate efforts by companies to shift production abroad to navigate escalating trade barriers.
Some firms, like Hong Kong-based CK Hutchison Holdings, have already faced challenges due to China’s heightened scrutiny of outbound investments.
While China’s outbound investments in the US dropped by 5.2% in 2023, the new limitations underscore the growing complexities for companies attempting to operate across borders amidst the intensifying trade standoff.