Mainland Chinese buyers’ acquisition of US property plunged by about two-thirds in the first half of the year because of disruption to investment activity caused by the coronavirus pandemic and escalating tension between China and the US, according to analysts. The sales volume of US property valued at not less than US$2.5 million bought with Chinese capital plunged by 68.1 per cent year on year in the first six months to US$314 million, data from the real estate consultancy showed. Investment in large cities, such as New York, Los Angeles and Chicago, fell the most. “Covid-19 has been the key reason for the drop as the lockdowns significantly dampened physical economic activity and overall investment sentiment,” said Martin Wong, associate director, research and consultancy of Greater China at Knight Frank. Investments in industrial property bore the brunt, shrinking by 92 per cent, followed by a 60 per cent plunge in residential assets and a 35 per cent decline in commercial real estate, he said. The pullback comes as friction between the world’s two largest economies have heated up recently. Chinese tech companies such as TikTok and Tencent are bearing the brunt of President Donald Trump’s hardline stance. Trump said he would take action against TikTok, WeChat and “countless” Chinese software companies that pose a threat to US national security. Washington has also stepped up scrutiny of Chinese companies listed in the US, while Beijing condemned a US official’s visit to Taiwan during the weekend. “Many commercial investors are waiting out the current Sino-American tension to see how the outcome will affect investment prospects,” said Georg Chmiel, executive chairman of Juwai IQI, the operator of Juwai.com, the largest international property website in China. France opens privacy probe into TikTok, as app eyes European data centre Chinese outbound investment in US commercial real estate declined 27 per cent year on year in the second quarter, the latest data from Juwai showed. In the same period, the number of inquiries by Chinese investors on US residential property via Juwai’s platforms recorded the smallest growth since the first quarter of 2019. Chmiel said that if Trump is re-elected in November for a second term, it would lead to a further drop in Chinese investment. Even before the Covid-19 pandemic, Chinese investment in US property was on the decline. Chinese investors spent US$11.5 billion from April 2019 to March 2020, a drop of 14 per cent from a year earlier, according to a report from the National Association of Realtors. In the previous 12-month period, the slump was much worse at 56 per cent as investors stayed on the sidelines due to the US-China trade war, the report added. The investment outlook for the rest of the year does not look bright, with Knight Frank expecting Chinese outbound investment in US residential and office property to slow down because of macroeconomic and political uncertainties. Knight Frank’s Wong expects overall transactions to drop by as much as 40 per cent for the whole year, with the residential sector sales likely to be halved.