China’s direct investment in the U.S. plunged in the first half even as its overall foreign acquisitions rose to a record, underscoring the nation’s efforts to diversify its portfolio, according to the Heritage Foundation.
China’s non-bond investments in the U.S. slumped 47 percent to $1.6 billion, while those in the rest of the world surged 34 percent to $29 billion, Derek Scissors, a Washington-based senior fellow at the group, said in a phone interview on Aug. 25.
Slumping direct investment in the U.S. mirrors China’s $51 billion reduction in purchases of Treasuries in the first half as it shifted part of the world’s largest foreign-exchange reserves out of dollars. The U.S. risks being “marginalized” in China’s non-bond investment plans because of opposition to its buying from lawmakers based on “China in our backyard hysteria,” Scissors said.
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