TLDR:
- US venture capital firms, including Sequoia Capital China and Qualcomm Ventures, have been accused by US lawmakers of funding Chinese tech companies that support Beijing’s military and its repression of minorities in Xinjiang.
- A congressional report released by the House of Representatives’ select committee on China scrutinizes investments made by five venture capital firms in Chinese AI and semiconductor firms with unsavory ties.
US venture capital firms, including Sequoia Capital China, Qualcomm Ventures, GGV Capital, GSR Ventures, and Walden International, have been accused of investing at least $3 billion into Chinese tech companies that support Beijing’s military and its repression of minorities in Xinjiang. A congressional report released by the House of Representatives’ select committee on China alleges that these firms funded Chinese artificial intelligence and semiconductor firms with unsavory ties. The report calls on the Biden administration to restrict US investment in Chinese firms that have been sanctioned by the US government over ties to China’s military or its repression of minorities. It also urges the administration to expand recent US curbs on investment in China to include more sectors.
According to the report, US venture capital firms have played a significant role in building and strengthening the priority sectors of the People’s Republic of China (PRC). The report argues that the current status quo is untenable and that US venture capital firms’ investments, including funding and knowledge transfer, have contributed to the growth and development of China’s military-linked firms.
The report calls on the Biden administration to take action to address this issue and protect US national security interests. It also urges the administration to work with allies and partners to develop a comprehensive strategy to counter China’s influence in key sectors. The report suggests that the US government should consider adopting a more targeted and coordinated approach to investment in China and establish a process to evaluate the potential risks and benefits of such investment.
So far, there has been no response from the venture capital firms named in the report or from the White House or the Chinese Embassy in Washington. It remains to be seen how the Biden administration will respond to these allegations and whether any further action will be taken to restrict US investment in Chinese tech companies.
