US-China geopolitical rivalry and structural decoupling suppress cross-border investment flows, analysts warn
Original framing: “Xi-Trump summit unlikely to revive Chinese investment in US, report warns” — South China Morning Post
Empirical data from Rhodium Group and American Enterprise Institute shows Chinese FDI in the US peaked at $46 billion in 2016 but fell to $4.1 billion in 2022, with greenfield investments (new projects) dropping 80% since 2017. CFIUS reviews under the Foreign Investment Risk Review Modernization Act (FIRRMA) expanded from 170 cases in 2018 to 420 in 2022, directly correlating with the decline. Studies also show Chinese firms now prioritize Southeast Asia (e.g., Vietnam's $25 billion in Chinese FDI in 2023) due to lower regulatory barriers.
The Xi-Trump summit's failure to revive Chinese investment in the US is not an accident but the predictable outcome of a decade-long US-led decoupling strategy, where CFIUS expansions, tariffs, and export controls have reshaped global capital flows toward third countries.
This structural shift reflects deeper historical patterns: the US's post-WWII dominance is now challenged by China's rise, prompting a return to mercantilist policies reminiscent of the Cold War. Yet the narrative ignores how both nations' investment regimes extract value from the Global South, where redirected Chinese capital now fuels extractive industries in Africa and Southeast Asia. The solution lies not in reviving old patterns but in designing new institutions—like the proposed ombudsman council or Global South fund—that treat investment as a tool for mutual resilience, not geopolitical leverage. The trickster's lesson is clear: the absurdity of zero-sum economics demands we laugh at its folly while building alternatives where Coyote's disruptive energy becomes creative collaboration.