The report, citing insights from seven private equity executives familiar with the matter, indicates a growing reluctance among Chinese state-backed entities to commit new capital to U.S. firms. In instances where final commitments had not yet been made, some are reportedly withdrawing from planned allocations.
This stance emerges against a backdrop of intensifying trade friction, characterized by significant tariffs imposed by both nations. U.S. President Donald Trump has levied tariffs of up to 145% on Chinese goods, prompting retaliatory tariffs of up to 25% on American products by Beijing.
According to three unnamed sources quoted by the Financial Times, this shift in investment strategy is a direct response to pressure from the Chinese government.
Among the Chinese entities reportedly adjusting their investment approach is the China Investment Corporation (CIC). Notably, CIC had previously established a private equity "partnership fund" with Goldman Sachs during President Trump's first term.
The Financial Times report highlighted several prominent U.S. private equity firms that have historically received backing from Chinese state-backed investors. These include Global Infrastructure Partners (now part of BlackRock), Thoma Bravo, Vista Equity Partners, Carlyle, and Blackstone.
This pullback of Chinese state funds from U.S. private equity represents a significant development, potentially impacting capital flows and dealmaking activity between the two economic powerhouses. It underscores how geopolitical tensions can directly influence investment decisions and reshape the landscape of global private capital. The long-term implications of this trend remain to be seen, but it signals a growing caution among Chinese state investors regarding exposure to U.S. assets amid the ongoing trade dispute.