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US crackdown on foreign buyers hits China's venture funds

Feb 6, 2019 by The Passage Team
US crackdown on foreign buyers hits China's venture funds

Washington's move to crack down on foreign acquisitions of homegrown pioneering technology is curbing investment from China's venture capital funds, who are struggling to find startups willing to take their money, several financiers say. Alibaba, the Chinese e-commerce platform which is also one of Asia's biggest tech investors, has admitted it will have to rethink its strategy in the US.

The new regulations have "made it very difficult for Alibaba and other Chinese companies to make investments in the U.S.," said Joseph Tsai, co-founder and executive vice chairman of tech investor and e-commerce platform Alibaba, in Hong Kong. "For the time being, we have to look at the other parts of the world."

"There will be fewer and fewer China-backed tech investments in the U.S. in the coming years," said Zou Dexin, a senior investment manager at BAIC Capital, the investment arm of state-owned Beijing Automotive Group, which has offices in Silicon Valley.

Chinese venture funding of U.S. startups hit a record USD 3.1 billion last year, but the second half showed signs of a slowdown as the new rules loomed, according to independent research group Rhodium.

Source: Nikkei Asian Review

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