The prolonged trade dispute between China and the US has raised concerns among foreign-invested enterprises. Foreign investors worry whether trade frictions will hurt China’s economic growth，whether the business climate overall will deteriorate or whether China will impose retaliatory restrictions on American or other companies. Opinions vary widely on the extent of the impact from the trade row. The US argues that it will “impose tariffs to drive American companies out of China,” while the World Bank’s Doing Business 2019，often seen as an investment bellwether，has stated that China’s business environment has actually been improving. In the article below，the author concludes that despite the damage to Sino-US trade relations，foreign investors still regard China as an attractive place for investment.

Negative Impacts

The Sino-US trade dispute has had a mixed impact on foreign investment in China. In examining investment trends it is essential to look at investment stocks and flows. If foreign invested enterprises close down，reduce production，and shift investment to other countries，that will reduce the foreign investment stock. However，Sino-US trade friction is not the only reason for the withdrawal of some foreign capital from China. Some of the other factors can be seen below.

Rising costs are the root cause of the outbound migration of manufacturing. China is no longer attractive for some types of manufacturing，particularly in labor-intensive areas. To cut costs，some companies have been shifting their manufacturing base to lower cost countries. It is an inevitable phenomenon in economic and industrial development. For example，Nitto Denko，one of the world’s top 500 companies，has closed its factory in Suzhou. Nikon，Fujitsu and Samsung have also moved their factories to Southeast Asia for cost reasons.