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Summary:

China has taken steps to restrict local companies from investing in the US, according to people familiar with the matter, in a move that could give Beijing more leverage for potential trade negotiations with the Trump administration.

Several branches of China’s top economic planning agency, the National Development and Reform Commission, have been instructed in recent weeks to hold off on registration and approval for firms that are looking to invest in the US, the people said, asking not to be identified discussing sensitive issues.

While China has previously placed restrictions on some overseas investments for reasons linked to concerns about national security and capital outflows, the new measures underscore tensions playing out between the world’s two biggest economies as Donald Trump ramps up tariffs. China’s outbound investments into the US totaled $6.9 billion in 2023, according to the latest available figures.

There’s no sign that existing commitments by Chinese companies in the US and elsewhere, or China’s purchases and holdings of financial products including US Treasuries, would be affected, the people said. It’s unclear what prompted the NDRC to halt the processing of applications or how long this suspension might last.

The NDRC and the Ministry of Commerce, both in charge of initial approvals for companies’ foreign investment, didn’t immediately reply to a request for comment. US equity futures dropped to session lows after the Bloomberg report. European stocks also extended their decline.