Chinese state-backed investment funds have reportedly halted investments in U.S. private equity. This action is a response to the trade war initiated by President Donald Trump.
Seven executives from private equity firms revealed the withdrawal. Chinese funds are pulling back from investments in U.S.-based firms. Three executives specified that the decision was a direct response to pressure from the Chinese government.
Some funds are also seeking to withdraw from investments in American companies. This includes investments made through acquisition groups based elsewhere. This decision comes as China faces the impact of new tariffs imposed by the U.S.
The U.S. tariffs threaten to significantly reduce trade between the two largest economies. President Trump imposed tariffs up to 145% on Chinese exports. Beijing has retaliated with taxes of 125%.
Chinese investors have changed their approach to U.S. private investment funds. No further financial commitments will be made to American companies. Some investors are even withdrawing from previously planned allocations.
The China Investment Corporation (CIC) is among the state-backed funds that have withdrawn. This confirms a significant shift in strategy. Chinese sovereign wealth funds had invested billions in major U.S. private equity groups.