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What trade war?

Chinese venture-capital investment in technologies in the U.S. reached nearly $2.4 billion through May, matching its previous full-year record set in 2015, according to a recent report by the Rhodium Group.

The jump isn't entirely surprising.

Dealmaking by Chinese investors through mergers and acquisitions in the U.S. fell during the first five months of 2018 as cash investments rose, reflecting a belief in China that the window for betting on American companies is closing with strict trade policies on the horizon.

"The writing is on the wall," says Jackie Liu, a corporate partner at Morrison & Foerster, a San Francisco-based law firm that advises its clients on M&A, venture capital, and private-equity financing.

Liu says expected political roadblocks from the Trump administration, in its escalating trade war with China, has prompted a last-minute investment rush.

The latest Trump administration plan would limit China’s ability to invest in the U.S. tech sector and block additional technology exports to Beijing. Exports of U.S.-produced technology judged crucial to national security, ranging from robotics to cryptography, would most likely face restrictions.

This has investors in China making a flurry of financial bets in the U.S. and scrambling for alternatives to the tech-rich U.S. economy when seeking investments in semiconductors, robotics, artificial intelligence, and biotech. "The protectionist policies of Trump and his rhetoric have sped up their decisions," Liu tells Barron's.

A likely winner is Israel, which is increasingly siphoning investments that might otherwise head to the U.S., Liu tells Barron's.

China's total investment in Israel nearly tripled in 2016 to $16 billion, largely because of funding of tech companies, according to ZAG-S&W, a Tel Aviv-based law firm specializing in cross-border transactions.

Meanwhile, as the trade war with China continues, Apple (AAPL), Intel (INTC), and Qualcomm (QCOM) are in the spotlight as U.S. companies that depend heavily on China for revenue.

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