US avoids singling out China in investment controls

Fear of retaliation moves Trump to take more roundabout route

20180628N Xi with Trump

Chinese President Xi Jinping, left, and U.S. counterpart Donald Trump in Beijing in November 2017. Trump appears to be shying away from a direct attack on Chinese investment.

TAKESHI KAWANAMI, Nikkei staff writer

WASHINGTON -- President Donald Trump's decision to back away from new restrictions specifically targeting Chinese investment in the U.S., opting instead to expand the powers of an existing body that oversees all foreign investment, signals his hesitation to clash head on with the Asian nation.

The president's reservations probably stemmed from the retaliatory moves that U.S. companies would face in China. But a strengthening of the oversight body would still be a major headwind to Chinese investment, complicating the relations between the world's two largest economies.

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