Silicon Valley says goodbye to Chinese funds

Silicon Valley says goodbye to Chinese funds

It was a convulsive day for Huawei. From 19 Sunday, the date of the official confirmation of the American veto to Chinese society, there was a whole list of events. The trade war provoked by US President Donald Trump was a long one. 2018 was actually a year through a cruise for Chinese tea. The issue ended when Google was attacked by the government, announced the release of its operating system of all Huawei devices. The beginning of a new era, especially for one of the largest mobile phone manufacturers in the world and, in another area, responsible for some deployments of future 5G networks.

The future of Chinese society and other entities of the country, especially technological ones, is completely uncertain. Meanwhile, other sectors carefully monitor developments at the government level. One of them relates directly to the world of investment; in particular, technology investments.

The development of China as a modern country was palpable. The modern world is a spectator of change in an Asian country. Popularly known as the region of copies and lack of innovation, China is currently characterized by the opposite. The growing dominance of the middle class, with an increase in the number of graduates among the best, dismissed the characteristic era of the country’s poverty. This change, accompanied by a strong incentive from the Chinese government – 6,000 million euros last year to create local innovations – creates the ideal ground for the growth of businesses. new technologies.

However, the years in which it was possible to find an American couple in China were long. Alibaba as a Chinese partner of Amazon or Tencent as Google. The Facebook universe will be hosted in WeChat, one of Tencent’s creations. Others, like Apple, just want to build a home in Asia, while the giant Xiaomi is growing every day. In addition, for several years, China has been financing its own Silicon Valley, which is expected to become the country’s economic engine. In addition, the level of investment in the science and technology sector is very similar to the level of investment in the United States over a very short period of time.

Raising capital, state business

This is not just the growth of domestic financing in China; Since 2018, the United States is not the only center of gravity for venture capital . In the second quarter of 2018, China accounted for 47% of global technology business financing – for the first time in history, surpassing the US.

The Asian capital saw the need to move across different sectors

In any case, Quid This story is precisely in Chinese investment in the United States. For a long time, the Asian capital saw the need to move across different sectors and countries. Slightly less than a year, Chinese funds are responsible for the largest round of funding for biotech enterprises in the United States, including Chinese companies themselves in their expansion – now more difficult – in North America. Thanks to this, more than 300 companies received Chinese investment.

And not only they, small American defense-oriented technologies, were the target of Chinese control. Already in 2017, Neurala, a military robotic company, traveled to China to raise funds to support its production line ordered by the US military. For the aerospace sector where Haiyin Capital invested an amount that was not disclosed by California-based XCOR Aerospace. In 2016, the mobile company Kateeva received 88 million euros through a private group of Chinese investors.

And not only Uber or Lyft – the great mobility empires in the United States – are just some of the companies that consider the Chinese organization among their investors.

Insult and Theft
That the Chinese capital is preparing for good deals Silicon Valley is undeniable. But what is an advantage to employers was not visible with such good eyes by the Trump government. What can be considered just money has a very important geopolitical component.

While small Californian companies collected their Chinese funds, this led to a loss of United States influence on their own companies; in addition to increasing the power of the “enemy” when it comes to managing the most advanced technologies. Thus, 3,000 million Chinese funds invested in the United States last year failed due to the New Year and the commercial decisions made against an Asian country. Because if there is something clear in the world of investors and entrepreneurs, it is important that political and regulatory calm is necessary. ,

If there is something clear in the world of investors and entrepreneurs, political and regulatory calm is necessary.
In 2018, the adoption of a law to modernize a review of the risk of foreign investment allowed us to control these Chinese investments. Since the advent of the new text, many companies seeking new funds have left foreign capital for the simple fact that they do not need to conduct a state investigation. It will be a kind of fear and blockade on both sides ,

This, however, does not mean that the lack of Chinese funds means the disappearance of what is now called the Mecca of entrepreneurship, but, perhaps, a slowdown in the pace of investment. As well as the possible migration of the same to Europe, where at the moment relations with the Asian country remain stable.

There is no doubt that the problem of Huawei and the trade war against China is only part of the tip of the iceberg in relations between the two countries. The complex weapon of globalization does not protect any of the parties.

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