A US congressional report has accused three venture capital companies of funding Chinese military-linked firms. The report, released by the House of Representatives’ select committee on China, highlighted investments made by Sequoia Capital China, Qualcomm Ventures, and GGV Capital in Chinese tech companies that support Beijing’s military and its repression of minorities in Xinjiang. These VC companies have reportedly invested at least $3 billion in such ventures. The report also raises concerns about investments made by these companies in Chinese artificial intelligence and semiconductor firms with questionable ties. Republican Congressman Mike Gallagher, leading the committee, has called on the Biden administration to restrict US investment in Chinese companies that have ties to China’s military or are involved in repression. The committee also urged the administration to expand recent US curbs on investment in China to include more sectors.
The report emphasizes that the current situation is unsustainable and highlights the decades-long impact of US VC investments in China’s priority sectors. It mentions the influence of funding, knowledge transfer, and intangible benefits provided by US VCs in building and strengthening China’s priority sectors. The report calls for stricter measures to mitigate risks associated with investments in Chinese companies.
Overall, the report signifies growing concerns among US lawmakers regarding US VC investments in Chinese companies, specifically those supporting Beijing’s military and contributing to repression. It underscores the need for stricter regulations and restrictions on US investment in such ventures to safeguard against potential national security risks and human rights abuses. The report also echoes broader tensions between the US and China, highlighting the ongoing focus on geopolitical issues and the increasing scrutiny on technology transfer and investments between the two nations.
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