Chinese Companies Cancel Billions In US Investments

The current president claims he wants foreign corporations to invest in America, but the policies he has put in place have led to the opposite result. Recently, Jinko Solar, one of the largest solar manufacturers in the world, elected to sell its stake in a solar panel manufacturing facility in Florida and cease doing business in the US. The manufacturing incentives provided by the Inflation Reduction Act actually accomplished what this president claims to want — foreign investment in the US.

But Bloomberg today reports that Chinese companies are walking away from billions of dollars in investments in the US, thanks to the increasingly hostile position of the US government, which is working furiously to rescind the incentives provided by the IRA. Its ultra aggressive policies toward foreign workers have also helped to sour those Chinese companies on doing business in the US.

China-based companies in the clean energy sector have scrapped about $2.8 billion in planned US manufacturing projects over the past 12 months according to research by Rhodium Group. As of the end of March, more than half of proposed Chinese clean-tech investments in the US announced since 2022 had been canceled, paused, or delayed, according to Rhodium’s calculations. In all, there has been a 17% decline since last year in all clean technology investment in the US, the Rhodium report said.

Pulling Back In The US

Bloomberg claims that producers of solar equipment, batteries, and electric vehicle technology have experienced a sharp reversal since the IRA tax credits lured Chinese companies to announce $5.6 billion of investments in 2023. Since then, the current administration has rolled back incentives. Of crucial significance was the so-called One Big Beautiful Bill last year that introduced new hurdles for manufacturers with ties to so-called “foreign entities of concern.”

“Jinko’s decision underscores the enormous challenges facing Chinese clean-tech firms operating in the US,” said Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute. The company’s move should be seen as “a chilling message to anyone that wishes to come and build factories in the US,” he said.

Last Friday, Jinko Solar agreed to sell about a 75% stake in its solar panel facility in Florida to FH Capital, a private equity fund. The main purpose of selling the stake is “to optimize its overseas asset allocation, ensure its long term strategic layout in the US, enhance flexibility and compliance, and facilitate its long term development,” a Jinko spokesperson said in a written response to Bloomberg questions. The decision was prompted by a need to comply with “US domestic manufacturing regulations” and to “minimize operational risks,” Jinko said in a corporate filing, without citing any specific regulations.

Jinko’s sell-down follows similar moves by China-based competitors to scale back exposure to the US or to exit entirely. Trina Solar sold a majority stake in its Texas assembly facility in 2024, and last year Corning acquired a JA Solar Technology factory in Arizona.  The provisions of the OBBB have made it harder — if not completely impossible — for factories controlled by Chinese companies, or reliant on China-dominated supply chains, to be eligible for lucrative manufacturing tax credits.

Credits Crunch

Losing access to those credits puts Chinese-owned factories at a “huge disadvantage” compared to domestic rivals, said Rob Barnett, a senior analyst at Bloomberg Intelligence. For example, Arizona-based First Solar, the largest US solar panel manufacturer, told investors in February that it expects to receive more than $2 billion in credits this year. While Treasury Department guidance on specific ownership thresholds for tax credit eligibility isn’t expected to be issued until later this year, analysts expect those conditions to be difficult for China-linked firms to meet.

“The policy environment is getting more restrictive,” said Margaret Jackson, a senior associate at the Center for Strategic and International Studies and previously a senior counselor for policy at US Department of Commerce during the previous administration. Those tougher rules mean the meeting this week between the two leaders in Beijing is unlikely to prompt new investments from China’s manufacturers in green technology industries, even though the US president has expressed openness to the idea on various occasions. “I’m not sure that below him there’s a lot of appetite to create space for more Chinese investment,” Jackson said.

US antipathy to China and Chinese investments is likely to prove ill-advised. Holding your breath until you turn blue and stamping your feet may work when you are two, but they are not generally considered to be signs of adult behavior. The tragedy of all this is that US was once an early leader in the clean energy space but knowingly and deliberately ceded its leadership role because of political beliefs that have nothing to do with sound business judgments.

The loss of Chinese investments will just put the US further back in the world’s rear view mirror, as the transition to an all electric economy based on renewable energy plays out in every other nation. Our children will be left to ponder what might have been and we will have no answer for them other than the ravings of a lunatic with infantile fantasies of dominance and lethality. MAGA will not make America great; it will make it a laughingstock on the world stage, and all because of the need to pander to the puerile fantasies of this tired old man we elected king.

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