– A US House panel has released a report calling for investment bans on critical tech sectors in China.
– Five US venture capital firms have invested at least $3 billion into Chinese tech companies that facilitate human rights abuses and bolster China’s military and computer chip supply lines.
– The report recommends imposing further restrictions on outbound investment in chips, AI, and quantum information technologies, and limiting US investment into these critical tech sectors, which China wants to dominate.
– The report highlights the need for sectoral investment controls to prevent US capital from flowing to entities that support the Chinese military or human rights abuses.
– US VC investment in China exploded after the mid-2000s, with the belief that economic ties would encourage economic liberalization in China. However, the opposite has happened, with US capital flowing into Chinese tech companies that support the regime’s authoritarian surveillance state and human rights abuses.
– Some of the VC firms mentioned in the report, such as Sequoia Capital, have divested from certain investments in China, but others have yet to do so.
– The report also mentions the fear and pressure faced by US firms cooperating with the committee’s investigation due to potential repercussions from the Chinese government and the Chinese Communist Party.
– The House panel’s report serves as a call for Congress to take action and regulate outbound investment in critical tech sectors to protect US national security and human rights interests.
