China’s regulatory crackdowns have affected U.S. and Chinese companies, but protectionist trade policies implemented by the Trump administration and continued by the Biden administration have severely restricted the ability of the U.S. government to protect U.S. businesses in the Chinese market. Unless the U.S. government changes course, American companies will be increasingly less able to address perceived wrongs in Chinese government policies and will be placed at a significant economic disadvantage in much of Asia.
In 2021, China launched regulatory crackdowns in many sectors, including the suspension of an Initial Public Offering (IPO) for Ant Financial, the antitrust investigation of Alibaba, the cybersecurity probe of Didi, restrictions on computer games, and a ban on private tutoring business. While these regulatory actions wreaked great havoc in the market, people normally assumed that they only affect China’s own companies and fail to appreciate the wider implications for foreign businesses. This analysis fills in the gap by discussing the potential effects on the trade and investment activities of foreign firms, especially American firms. It further discusses potential actions the U.S. government and American businesses could take to better protect their interests and minimize the negative impacts.
To read the full report by the National Foundation for American Policy, please click here.