Chinese investment means increased pressure on tech oligopolies* to increase censorship of media critical of China. They've been branching out to increase soft influence, keep news sites and Olympic committee from recognizing Taiwan as a separate nation. Then there's what is currently going on in Hong Kong. Chinese investor cash is effectively Chinese government investment. It's not a good thing.<p>*edit
Good. We raised Series A from Chinese investors a few years ago and they were toxic. Not to mention the political implications of enriching countries like China and Saudi Arabia. In hindsight would have rather closed up shop than taken their money.
I'd be more concerned about Chinese financing of Hollywood. Nearly every big-budget production these days has Chinese co-producers. This leads to farcical episodes like the remake of Red Dawn featuring feeble North Korea as the villain rather than China as originally envisioned.
It's not just Chinese investors, even having large Chinese customers raises red flags during BD work for us.<p>We provide a SaaS for data analytics and often we hold a copy of the client database to provide rapid answers to queries.<p>We were recently finalizing a deal with a US based retailer when it came out that we worked operated in China and the tone of the conversation shifted immediately. They literally sought all manners of guarantees on data security and storage that were unnecessary, but due to the current climate, seems to make everyone paranoid.<p>Now we have to specificlly mention in our integration docs that when we do multi-zone backups, none of those backups are in China. They never were, but now we have to be explicit because it's coming up in so many of our conversations.<p>Our pilot with the Chinese company ends in November. We are seriously considering terminating the deal because it's trending towards the case where we can either have China, or Non-China markets. Not both.
Here is a snippet of the article, which I am posting under the Fair Use Act (I think you should all consider a subscription):<p>"Silicon Valley startup Pilot AI Labs Inc. signed a Chinese-backed venture-capital firm as its first big investor. By last summer, Pilot AI wanted it gone.<p>The U.S. startup hoped to sell more of its artificial-intelligence software to the U.S. government after working with the Pentagon, according to people familiar with its operations, and worried its effort could be hurt by the investor’s ties to China’s government. The chairman of the Chinese-backed investor, Digital Horizon Capital, was asked to sell back its stake, said one of the people. He angrily refused.<p>Chinese investors were once embraced in Silicon Valley both for their pocketbooks and their access to one of the world’s largest and trickiest markets. Today, they are suddenly less welcome.<p>Since late last year, amid rising U.S-China tensions, venture firms with China ties have been dialing back their U.S. investments, structuring deals in novel ways to avoid regulators or shutting their U.S. offices. Some American venture firms are dumping their Chinese limited partners or walling them off with special structures. And some U.S. startups that have taken significant Chinese money are keeping the investments quiet or trying to push their Chinese investors out to avoid scrutiny..."
Hey, Chinese money is bad. But Saudi money is more than welcome. 50% of Softbank's vision fund is from Middle East sovereign funds, who have even more brutal censorship laws and commits more brazen human rights policies. US policy is completely incoherent and probably explained by who pays the bribes to Whitehouse vs. any legitimate principles.
The reverse is also happening and is a <i>way</i> bigger deal.<p>Resources are also being pulled out of China, as U.S. companies have spent the last several decades plowing tens (if not hundreds) of billions into China a year. It'll be a fairly large windfall coming out of China as well. To India, Mexico, Taiwan, the United States, etc.
Unlaundered Chinese cash, of course. Hop it through an "investment" somewhere else and suddenly it's the investment arm of a multinational REIT.
I doubt it. During the Khashoggi thing it turned a few heads but most businesses just stayed quiet for the few months it was a thing. Now biz as usual. I would expect that the same is happening for China money. Hush hush until we get out of the cloud.
It's interesting: Chinese cash is welcome in real estate and the US treasury market. What is it about startups that makes the government concerned?
Writer of the article here. Totally get the frustrations with paywalls. Bottom line is feature stories like this take weeks, months, sometimes a year or more to produce. Sites without paywalls have to go for clicks (which are worth close to zero now that Google/Facebook gobble up most online ad budgets). If low value clicks are all you have, you end up like dailymail.co.uk.<p>If you want high value news, you have to pay someone a reasonable salary to report/write it.<p>Anyway, hope you enjoy and here's another fun part of the story:<p>The FBI office has conducted hundreds of briefings for companies on cybersecurity threats and economic espionage. It discourages people from using their regular smartphones and laptops when traveling in China and warns male U.S. executives to avoid “honeypot” espionage attempts by attractive women. “If you’re not a 10 in the U.S., you’re not a 10 in China,” officials say they’ve told the executives.
In conjunction with the trade wars and increasingly hostile posturing between leaders, I'm nervous that the ultimate consequence may be war between super powers.<p>If raising the number of trading partners decreases the likelihood of war, decreasing may increase it's chance instead.<p><a href="https://phys.org/news/2015-12-partners-wars-nations.html" rel="nofollow">https://phys.org/news/2015-12-partners-wars-nations.html</a>
Anyone else paranoid about TikTok (owned by Chinese co ByteDance)? The fact that it's basically a video recording app it's hard to believe there <i>isn't</i> a backdoor to it.
Regardless of the wider debate, it's very sad to learn that Shoucheng Zhang decided to take his own life. He was the only VC I've ever had a legitimate, deep technical discussion with, and I respected him as a scientist.
Even if the Chinese government never interfered with a single company, I don't want Chinese corporate culture "leeching into the groundwater" as it were. They put Europe and the US to shame when it comes to not giving a damn. About safety, the environment, intellectual property, you name it.
Anecdata time:
In 2012 Canada allowed the sale of Nexen (an oil company) to CNOOC. CNOOC management promised they would keep the staff in Canada, the management local etc.<p>Fast forward 7 years later and it's a ghost town, they cite "business need" but somehow all the jobs have moved abroad and the only thing remaining in Alberta is a resource pump sending all the value abroad.<p>This comment is not intended to be about racially Chinese people, but the constantly malicious and negative behavior of the communist government in China.
Why would you post the paywalled version of the link?<p><a href="https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-in-silicon-valley-following-u-s-pressure-campaign-11560263302?mod=rsswn" rel="nofollow">https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-...</a>
Chinese cash may be toxic in Silicon Valley, but not in Silicon Wadi!
Which is why we're deliberately transferring our high-tech sector to Israel. None of this makes any sense for America.
So long as Chinese money comes with so many strings attached (political concessions, IP transfer) this is good for the US and US companies. Hard to imagine a country where investing comes with so much additional baggage.
For those who claimed Chinese cash is toxic, let me ask you an important question: what about Softbank's cash that primarily coming from Saudi? What about the Ivy League schools' endowment money donated by "morally unethical"(including but not limited to middle east) sources? Are you not going to send your children to Ivy League schools?
Could somebody explain to me the vicious American hate for China from a totally uninformed viewpoint? Any links to read why I should also dislike China?
Many people critique the system of global capitalism, however 'can we please return to feudalism', is not generally what most of them were meaning.
I'm all for openness and transparency, but wouldn't an increase in US refusal to play with China just lead to more censorship and oppression by the communist Chinese government?<p>Consider the following:<p>1. The Chinese communist government derives its legitimacy to rule almost exclusively from its massive economic growth (i.e. Chinese citizens and corporations are effectively saying to themselves "I'm ok to trade some of my human rights for lots of money")<p>2. The Chinese communist government wishes to remain in power<p>So if the US decides to target Chinese economic growth - i.e. lower the amount of money that an unit of human rights could buy - this should cause the Chinese citizens and corporations to respond by exercising the human right that the Chinese government is no longer able to buy with growth. In turn, this would cause the Chinese government to use alternative methods (i.e. straight-up oppression by force) to prevent the Chinese people from becoming unruly.<p>This sort of pressure on the Chinese government may lead to reform (which is indeed a good thing), but it may also lead to civil / politic unrest and a massive economic slow-down that will have aftershocks around the world (which is certainly less than ideal) - and all of this pretty much will depend on how Xi decides to handle this pressure.<p>Here in the US, We should at least recognize that this is a risky move and take measures to protect ourselves against this (somehow)
I always laugh whenever I remember how Zuckerberg was pandering to the Chinese, like insisting to poorly speak Mandarin on some QA panel with Chinese students and such.<p>The times they are a-changin!
This is the turning point where tech has become a munition again. Rather than export controls, it's business blacklists.<p>It's a weird switch. Before we would sell billions in arms around the world with little risk of it being used against us. But digital munitions can be used against anyone, anywhere, any time. The USG will have to tightly control all tech used in the country to prevent cyber weaponry being used against us.