The People’s Republic of China is modernizing its military for a potential conflict with the United States, with Xi Jinping aiming for readiness by 2027—though a slowing economy may delay this goal.
Despite these tensions, China continues to benefit from U.S. capital markets, with significant funding for the People’s Liberation Army (PLA) coming from American investors and consumers, effectively putting U.S. money to work against its own interests.
Since 2012, U.S.-China financial ties expanded significantly but have contracted since 2020 due to China’s economic slowdown, increased capital controls, and heightened U.S. government scrutiny of investments in China.
Much of this slowdown can be directly attributed to President Trump’s U.S.-China trade war, which significantly curtailed China’s access to U.S. funds.
During his first term, President Trump recognized the China threat and imposed numerous restrictions to decrease China’s access to U.S. capital.
His administration banned U.S. investments in Chinese firms linked to the military and intelligence sectors through Executive Order 13959 and pushed for the delisting of Chinese companies that failed to comply with U.S. audit requirements under the Holding Foreign Companies Accountable Act.
The expansion of the Committee on Foreign Investment in the United States (CFIUS) blocked Chinese acquisitions of U.S. firms in sensitive sectors, such as technology and infrastructure.
Trump also implemented Section 301 tariffs on over $360 billion worth of Chinese goods, reducing their competitiveness in U.S. markets. Export controls targeted critical technologies, while the federal retirement fund was barred from investing in Chinese firms.
Hellbound and Down 