TLDR:
– US lawmakers have accused venture capital firms, including Sequoia Capital China and Qualcomm Ventures, of investing at least $3 billion in Chinese tech companies with links to the military and human rights abuses.
– The House of Representatives’ select committee on China has called on the Biden administration to restrict US investment in Chinese firms sanctioned by the US government and expand curbs on investment in China across more sectors.
US venture capital firms, including Sequoia Capital China and Qualcomm Ventures, have been accused by US lawmakers of funding Chinese tech companies with links to the military and human rights abuses, according to a report released by the House of Representatives’ select committee on China. The report alleges that at least $3 billion was invested by five venture capital firms, including Sequoia Capital China, Qualcomm Ventures, GGV Capital, GSR Ventures, and Walden International, in Chinese companies involved in military activities and the repression of minorities in Xinjiang. The committee has called on the Biden administration to limit US investment in Chinese firms sanctioned by the US government and has urged for stricter regulations on US investment in China across more sectors. The report claims that decades of investment from US venture capital firms have helped to build and strengthen China’s priority sectors.
A number of the venture capital firms mentioned in the report have responded to the allegations. GGV Capital has stated that it plans to separate into two independent firms, GGV Capital US and GGV Capital Asia, by the end of March, and asserts that the company has complied with all applicable laws and regulations. Richard Lim, managing director of GSR Ventures, declined to comment on the allegations. Sequoia Capital China, Walden International, and the White House did not respond to requests for comment, while Qualcomm Ventures could not be reached for comment. A spokesperson for Sequoia Capital has stated that Sequoia Capital, Sequoia Capital China (now known as HongShan), and Peak XV (formerly known as Sequoia India/SEA) are now fully independent firms. The spokesperson added that Sequoia Capital will continue to focus on investing in technology companies in the US and Europe and that the firm takes US national security issues seriously and is committed to compliance with US law.
The Chinese Embassy in Washington has responded to the allegations, stating that the use of national security and human rights as justifications to restrict US investment in China would undermine the principle of free trade and disrupt global supply chains.
