The New York Times has reported that the once steady flow of the Chinese cash in the US has died down. To be honest, more than 90% of the Chinese cash in the country has dried out.
This fact does not come as surprise since the trade war between the two countries is on an all-time high. Ever since Trump took the office, the Chinese have found it hard to continue as they used to before. Furthermore, the cash flow from China is drying out as there is an increase in the security and the scrutinization of the materials and there is a hostility towards the Chinese.
The effects of the Trade War can be seen in various areas of the economy. Because of the increasing hostility towards the Chinese by the US and Beijing’s limited spending, it is hard to make things better. Additionally, markets such as Silicon-Valley, the real estate market in Manhattan, and the state governments, who spent years wooing the Chinese investments, are facing a tough time.
Furthermore, it is easy to see how two of the largest economies in the world are failing at each other as they continue to fight. After years of integration, this comes as a massive shock. According to Eswar Prasad, the former head of the International Monetary Fund’s China division, the fact that foreign direct investment has fallen sharply is a direct indication of how bad the situation is.
Furthermore, the fact of the matter, at this point is, that the US does not trust the Chinese and China does not trust the US. With that being the case, it is hard to see how any of this is going to continue. Only time will tell how this trade war will come to an end.