High-Tech Horrors: China's Cash Pipeline To Silicon Valley Is Clogged

Most coverage of the mounting US-China strategic tensions has focused on tariff threats.Equally significant are moves by the US to choke off Chinese investments in the US technology sector. These moves are part of a strategy to ensure that China can’t catch up to the US in critical technology fields by buying, or buying into, cutting-edge American firms.

 

Alarm bells began ringing in 2014, when Chinese investors started to surge into venture-capital funding rounds in Silicon Valley. In 2016 the total annual Chinese direct investment of all kinds in the US tripled to US$46bn. The targets of Chinese acquirers were varied, but a good chunk of that money went into technology firms. Some observers believe the wave of spending was prompted by a mandate under Beijing’s Made in China 2025 industrial policy for Chinese firms to boost their technological capacity through foreign acquisitions.

 

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