In a new report, the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party has accused five U.S. venture capital firms of investing an estimated $3 billion in Chinese technology that is being used to fund the Chinese military and commit human rights abuses. According to the report, the American funds are invested in cutting-edge technology in China, particularly in the fields of artificial intelligence and advanced semiconductors. The committee has warned that these investments are undermining U.S. technology leadership and policies aimed at preventing China from advancing its communist system. The report called for new restrictions on capital flows to China.
The panel investigated five venture capital companies: GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital, and Walden International. The companies cooperated with the committee’s investigation and provided information on their activities. The committee concluded that the amount of funding linked to the Chinese military and human rights abuses may be far greater than the $3 billion traced during the probe. Some of the venture capital firms are now divesting from China as relations between the U.S. and China have deteriorated in recent years. The report also highlighted China’s pursuit of technological supremacy over the U.S. under its military-civil fusion program, which requires all civilian know-how to be made available for China’s military buildup. The report argued for legislation to ban all U.S. investment in Chinese companies linked to the military and human rights abuses.
