This chapter examines China’s investment activities, utilizing project-level data available on greenfield investments that reflect how Chinese firms have responded to the US-China trade war. Investment patterns indicate some degree of anticipation from the private sector. Overall investment patterns drop sharply before the actual start of the trade war. The decline coincides with the start of the Trump Presidency in the United States and the initiation of the Section 301 investigation. Chinese firms, and possibly firms more generally, respond first to the overall political climate and are well ahead of concrete policy changes. There are also notable changes in the regional distribution of Chinese firms’ investments. Asia’s attractiveness as an investment destination grows with the escalation of trade tensions, but there is also increased diversion to Europe for locating Chinese investment. There is a marked decline in greenfield investment in the United States, and Russia emerges as an important recipient of Chinese greenfield investment. Manufacturing, electricity, and construction continue as mainstays of Chinese investment choices, and similarly, real estate; coal, oil, and gas; and metals are top investment sectors for Chinese firms.

The chapter provides an overview of US agreements with Asia. It first assesses the Asia polices of Presidents Obama, Trump and Biden and their key trade pacts with Asia-Pacific countries. The chapter also discusses the China challenge in the new era of President Xi Jinping and US measures that resulted in the US-China trade war. Moreover, it examines security and economic initiatives that underpin the ASEAN-US strategic partnership, as well as landmark features of the TPP and the subsequent CPTPP. Finally, the chapter proposes a two-pronged roadmap for the Biden administration to reassert US leadership in new Asian regionalism. The roadmap calls for the White House to prioritize accession to the CPTPP and to transform the TIFA to the ASEAN-US FTA, which allows for flexible participation by ASEAN countries.

As all chapters were being readied for submission, Covid-19 erupted furiously in early 2020, compelling the effort to incorporate the pandemic’s initial effects on GSCs, the trade and technology war, and international relations within East Asia, in real time. Chapter 13 is, therefore, a postscript distilling findings from Parts I and II prior to Covid-19 while addressing the latter’s early effects on the chapters’ respective arguments. It then analyzes the strategies GSCs have embarked on in response to both geopolitical and pandemic shocks, building largely on preliminary 2020 survey data. Covid-19 accelerated the cumulative impact of geopolitical shocks and rising inward-oriented hyper-nationalist models, making GSCs more vulnerable than at any time since their initial expansion in the 1990s. Their ongoing restructuring and efforts to reduce overreliance on China suggest a potential decline in China’s status as factory of the world relative to the past, but hardly its demise. Migration out of China and reshoring remain more the anomaly than the norm for now. There is still uncertainty, however, as to whether geopolitics, technological competition, and the legacy of Covid-19 could unleash even more sizable disruptions in the global geography of production.