Chinese VCs have lived the high life of Silicon Valley. Now the party is over Wired

With top-ranked American colleges—including Harvard, the Massachusetts Institute of Technology (MIT) and Carnegie Mellon—academic ties have been strengthened by hosting forums for Chinese investors. These are now under new control. In the year In January 2021, the FBI arrested MIT professor Gang Chen in January 2021 on federal grant fraud charges. The charges were later dropped.

It was at this point that Michael decided to leave America, return to China and join a startup founded by a few friends. “At that time, China seemed to have a lot of opportunities, but there were too many political issues when doing business in the US,” he said.

Since then, President Joe Biden’s administration has continued to pressure China’s tech sector, imposing new export controls, investment restrictions and tariffs. In October 2022, the U.S. Department of Commerce issued new rules that would bar U.S. companies from exporting technology used to make advanced chips or supercomputers. The White House is close to reaching a deal limiting US investment in Chinese technology companies and barring some deals in critical sectors, including microchips. Under pressure from China and the US, some Chinese technology companies, including Raid Geelying’s DD, have been withdrawn from US markets. Others, including podcast platform Himalaya, have postponed their own plans to list in the US. US lawmakers are officially considering banning TikTok, the social media platform owned by Beijing-based ByteDance.

These attacks have drawn angry reactions from some in China. Andy Mok, a Beijing-based China and Globalization Research Fellow, said Chinese investors still want to work with their American counterparts, but “this hostility from the US side creates obstacles.”

“I find it sad that so many Americans have been poisoned by the Western media about China,” Mock says.

Many Chinese investors have left America; Others are keeping a low profile. Before the dissolution of Sino-American relations, Chinese-American academics served as bridges between the two countries, and participants in formal exchange programs and incubators. “But many academics like Chen Gang have been investigated by the FBI, and now they are too scared to deal with Chinese investors and the Chinese government,” Liu says.

Liu’s company is shifting its focus to Europe, Israel, Japan and South Korea.

USC Orlando is now rarely approached by Chinese investors and founders are wary of taking Chinese money, he said. “People think ahead and consider the potential risks. Founders know the risk of becoming dependent on Chinese investment, just as I have startups who consider the risk of building a following on TikTok.

But despite the obstacles, there is still a significant flow of money from China to the US. American markets are growing, and there are opportunities in uncharted economic sectors. And many wealthy Chinese see the risks in the U.S. more at home.

Chin, the logistics entrepreneur, said she has noticed a shift in focus among Chinese investors in Silicon Valley. Their motivation is not what it used to be – it’s not about “going public” or “bringing American technology to China.” “They are talking about transferring money from China,” she says. “They are afraid that sometimes in the future, the Chinese government will burn them.”

According to data from New World Wealth, a wealth information firm, about 11,000 wealthy Chinese in 2010 They left China in 2022, the highest since 2019.

Michael is considering immigrating to America again. The mixed start was good at first but went downhill when the outbreak hit. A strict “zero-covid” policy and server lockdowns have been a challenge to his personal life, while government restrictions on technology, education, gaming and cryptocurrencies have meant his ability to continue doing business has been strained. “There are so many uncertainties here in China,” he said.