While Donald Trump might take a hard line on Chinese exports to the United States, he will likely welcome Chinese money, ­according to business observers.

The US president-elect threatened a trade war against China during his campaign, vowing to levy a 45 per cent punitive tariff on Chinese imports to save American jobs.

But a Trump administration would open its arms to Chinese money flowing into the United States, Jack Wadsworth, former advisory director of Morgan Stanley and honorary chairman of Morgan Stanley Asia, said at a ­forum on Monday.

 

 

“I think the new administration will recognise that cross-border capital flows are good and help job creation and economic growth,” Wadsworth told the ­forum on US-China investment in New York.

Trump has pledged to spend US$1 trillion over the next decade on infrastructure, including “highways, bridges, tunnels, airports, schools and hospitals”. That plan would be mainly funded by the private sector.

Meanwhile China, with the world’s largest foreign exchange reserves and a track record of building things quickly, is eyeing investments in the US.

 

Two-way investment between the world’s top two economies is deeper and larger than official data suggest, according to a research report by the National Committee on US-China Relations and the Rhodium Group, and released at the forum.

It said American investment in China was three times higher than official statistics, while Chinese investment in the US was up to fourfold more than reported.

An influx of Chinese investment to the US last year exceeded the flow going the other way, ­according to the report.

Wang Shuguang, general manager of US operations for China’s Broad Group, an air-conditioner maker based in central China, said Trump would need external funding for his economic plans.

 

“He will welcome all inbound investors, including those from China,” Wang said, speculating the real estate mogul would welcome Chinese investors wanting to buy assets in the United States, especially in those hotels, properties and other real estate bearing his name.

While Chinese firms such as Anbang Insurance were aggressively buying assets in the US, direct investment in China by US investors had been in decline since 2012, the report said.

Wadsworth said there were three reasons why this was happening: China is a less attractive place to invest; it has excessively tough regulations; and there is a perception that the Chinese don’t want American investment.

Daniel Rosen, a Rhodium partner and chief author of the report, said Beijing and Washington missed their best chance to sign a bilateral investment treaty. “Practically speaking, it’s going to be difficult to get this back on track in the short term,” Rosen said.

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