Slashdot Mirror
Chinese Tech Investors Flee Silicon Valley as Trump Tightens Scrutiny (reuters.com)
New Trump administration policies aimed at curbing China's access to American innovation have all but halted Chinese investment in U.S. technology startups, as both investors and startup founders abandon deals amid scrutiny from Washington. From a report: Chinese venture funding in U.S. startups crested to a record $3 billion last year, according to New York economic research firm Rhodium Group, spurred by a rush of investors and tech companies scrambling to complete deals before a new regulatory regime was approved in August. Since then, Chinese venture funding in U.S. startups has slowed to a trickle, Reuters interviews with more than 35 industry players show. U.S. President Donald Trump signed new legislation expanding the government's ability to block foreign investment in U.S. companies, regardless of the investor's country of origin. But Trump has been particularly vocal about stopping China from getting its hands on strategic U.S. technologies.
The new rules are still being finalized, but tech industry veterans said the fallout has been swift. "Deals involving Chinese companies and Chinese buyers and Chinese investors have virtually stopped," said attorney Nell O'Donnell, who has represented U.S. tech companies in transactions with foreign buyers. Lawyers who spoke to Reuters say they are feverishly rewriting deal terms to help ensure investments get the stamp of approval from Washington. Chinese investors, including big family offices, have walked away from transactions and stopped taking meetings with U.S. startups. Some entrepreneurs, meanwhile, are eschewing Chinese money, fearful of lengthy government reviews that could sap their resources and momentum in an arena where speed to market is critical. This comes at a time when Chinese investors have visibly become more active in emerging markets such as India.
The new rules are still being finalized, but tech industry veterans said the fallout has been swift. "Deals involving Chinese companies and Chinese buyers and Chinese investors have virtually stopped," said attorney Nell O'Donnell, who has represented U.S. tech companies in transactions with foreign buyers. Lawyers who spoke to Reuters say they are feverishly rewriting deal terms to help ensure investments get the stamp of approval from Washington. Chinese investors, including big family offices, have walked away from transactions and stopped taking meetings with U.S. startups. Some entrepreneurs, meanwhile, are eschewing Chinese money, fearful of lengthy government reviews that could sap their resources and momentum in an arena where speed to market is critical. This comes at a time when Chinese investors have visibly become more active in emerging markets such as India.
Seems very anti-business and it will hurt us. Perhaps not immediately, or much a year from now, but we're eating the seeds of business that could be giant cash crops over the next 5 to ten years (and everyone will blame the stuttering economy at that time on whichever poor fool happens to be president then).
"That's the way to do it" - Punch
Someone will share the general terms of these deals, at least what is on the cover? I will wait patiently
making stuff in red china with poor IP laws is bad as well.
Kick out these fucking spies.
Good. I'm no fan of Trump, but the sooner Chinese hot money is pulled out of the markets, the better. It just drives up prices and causes inflation.
Maybe. But shouldn't a business be able to make that decision for itself?
No -- there should be tariffs on Chinese goods and services to account for their poor environmental and human rights practices. After all, pollution doesn't respect borders.
The issue here is you are dealing with a country without an open market system. China's economy has market mechanisms for some things, but mostly, it's tightly controlled by the state. The state has direct influence and control over nearly every aspect of the economy. If they decide your business is too important for you to run it, the state will simply take it over and there is absolutely nothing you can do about it. China's government doesn't see their economy as thousands of self-regulating parts. They see it as one large machine that they control. The problem is, as with any large entity, that management becomes impossible, and any mistake you made at a high level is amplified a thousand times greater than if a single company made an error.
You can see how fragile and fundamentally screwed up their economy is by the rescinding of the American ZTE ban. If left in place, the ban would have essentially crushed China's economy, because the expansion of ZTE was built into China's economic plans. Factories were built. Apartments were built for the workers. Capacity expanded at suppliers. Supply chains were set up ahead of time. Everything was prepared. If ZTE failed, a chunk of China's economy would freeze. In a normal market economy ZTE would go out of business and it's competitors would absorb the lost business. That's not what was planned for, though.
This is whom the investors are representing. China is trying to spend and expand it's way out of it's problems instead of fixing them. It's what Japan tried to do in the 80's, and the result was a crashed economy with a decade of stagnation. We shouldn't be encouraging this type of behavior.
My Other Computer Is A Data General Nova III.
I'm still a little fuzzy on how waving money around in the air cleans up pollution. Could you help explain?
+ Find a problem.
+ Make the problem 10x worse than it actually is.
+ President takes action.
+ Investors disappear.
+ Companies panic.
+ New investors save the day.
+ Pay 50% (or less) what they should have.
+ Find out investors are friends of President.
Funny how that worked out.
Care killed the cat, but satisfaction brought it back.
Part but not all of the reason Chinese goods are cheaper is that they don't have to worry about polluting the environment or workers rights (not that the USA is very hot the latter either). As such a tariff on goods manufactured in China to account for this will put the price up and make it more attractive to manufacture elsewhere. The trick is to target the tariff at any manufacturing not to western standards.
They can move their business wholly to China, yes?
Depends on...
1. Is that Business making products that will be used in the US government or US defense.
2. Will that business seek redress from the US Government after the Chinese steal their intellectual property and then run that business..out of business?
The Chinese government is a bad actor and they are NOT our friends. Their people may be, but not the government.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Why the hell we started business with a communist country in the first place is baffling. COMMUNISM IS EVIL!
Sounds like more BS being spun as something anti-Trump, meanwhile China has been making it extremely hard for their wealthy to move any money out of China as their economy has been faltering the last couple years and their govt is afraid of their wealthy moving money out of China
By making the goods too expensive to buy and shifting economics in favor of either local manufacture or repair/reuse.
Patent trolls and the East Texas court aren't good for business either. Neither are 70+ year copyright terms.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
It seems the author of the article is confused. It's about Making America Great Again; not Making China Great Again.
*gasp* A conservative techie who loves Trump and America.
why not start with the current US government ignorance of global warming problem.
To reduce systemic risk we either need to deleverage our trade relationships or reconcile our strategic differences or both.
China and the US have become huge trading partners and China has a lot of dollars. The assumption over the last 30 years has been that China will become more friendly and democratic as they become richer and more powerful and have closer trading relationships with the rest of the world. Unfortunately while the economy has grown and grown Chinese society is no less incompatible with US society. China is a totalitarian state which has used technology to expand their totalitarian system rather than empower their citizens with new freedoms.
Internal affairs of China wouldn't be a great issue with the US, as we are stated allies with regimes like Saudi Arabia, but we have serious strategic differences with China over the South China Sea and Taiwan. While most Americans (and most Chinese for that matter) don't care about either the South China Sea or Taiwan the foreign policy and military establishments of both nations and the low level strategic rivalry could make that change very quickly with a miscalculation that results in loss of life or otherwise changes the little cold war into a shooting one.
This level of strategic rivalry between nations whose economies are aligned as if they were allies is a huge problem for both countries and it would be preferable to resolve our strategic differences so the trade issues can be handled from a partner's perspective as if we were dealing with the UK or the EU rather than a strategic rival with a society based on a way of life we are trying to keep out of the US.
orange man bad
Right remind me again why Facebook, Google, and Twitter got hauled into Congress to explain Russia hacking or Cambridge Analytica's access to data?
The U.S. government often over sees areas of technology when it feels national security or interests are at risk. The U.S. government restricted sales of Apple's computers to certain countries.
This is par for the course.
No -- there should be tariffs on Chinese goods and services to account for their poor environmental and human rights practices.
Ummm you are aware that the US is the biggest polluter per-capita in the world of any major industrialized country, right? The only reason China exceeds us on some measures in absolute numbers is because they have 4X the number of people. You are aware that our current administration is right this moment doing everything they can to permit companies to pollute their greedy little hearts out right?
And the US human rights record is nothing stellar either. I point you at Guantanamo Bay, several recent wars of adventure in the Middle East, the percentage of people (esp minorities) the US has behind bars which is higher than China, and the list goes on. If you want to delve into our not distant past there is plenty to choose from there too. Hell, it was in living memory for some of us when black people were subject to Jim Crow laws. The US might be better in some ways than China but our hands are FAR from clean on civil rights.
After all, pollution doesn't respect borders.
That's true so the US should stop doing it.
You're off topic.
Bring Hitler in next, OK?
China is fed up with the US and is in a position to go out on its own and replace America as the world's leader.
China doesn't give a rat's ass about IP any more than US businesses care about doing business in the US.
It little behooves the best of us to comment on the rest of us.
So will the rent finally go down when they have to lower salaries/fire people?
Don't worry, China hasn't adopted the US' poor IP laws yet.
Seriously, China's "poor IP laws" are one of maybe three major reasons they've been growing so much faster than the US. Patent maximalism is actively bad for innovation and business growth in fast-moving fields. You have clear evidence for that. The only reason anybody would deny that at this point is blind, slavish, mindless devotion to the idea that everything has to have an owner, facts or no facts.
Copyright maximalism is also bad.
Get those commies out of the USA.
The less exposure American companies have to the Chinese business culture of speech controls and pro-China mercantilism the better. It'll hurt the bottom line a little now, but it won't be Pearl Harbor twenty years down the line. Now about those 25% tariffs on consumer goods...
The Nazi Party: Regulation of business, gun control, national healthcare
The Nazi Party: Ignorance of Constitution, lover of Despots, Greed over Humanity
FTFY.
That's not true in the EU, the environmental costs of outsourced pollution are factored in to the environmental taxes that EU companies have to pay.
Plus China is actually cleaning up quite rapidly now, rather than using poor environmental standards to its advantage (like the current US administration wants to).
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
In the US, you have quite a bit of regulatory capture, which is a whole other ball of wax.
My Other Computer Is A Data General Nova III.
Orange Fan Mad
No. That's too much pressure to comply with China for the huge market. If everyone cannot comply unless they respect IP, then everyone outside China wins. Similar to the concept of a union preventing "voluntary unpaid overtime."
Your ad here. Ask me how!
Why does Boggled Frump have any business credibility at all now? Why do the Republicans get a free pass on this sh*t?
They are coasting on tattered credibility and an image that doesn't currently exist.
"Trade wars are very good and easy to win." Frump is a clever businessman.
"There are no tariffs." Winning!
"Chinese investors leave Silicon Valley." Coal is the key to the economic future. Big, beautiful coal!
"USMCA! YMCA!" Just like NAFTA except, well, actually it's just like NAFTA.
Prease 2 lrn2engrish.
_grokparsefailure.
The number of poor in China that have access to nearly zero electricity probably skews their per capita measure that doesn't address anything other than "they are a developing nation".
Doesn't matter because China's absolute pollution numbers in many cases barely exceed those of the US despite having 4X the population. Sure their per-capita numbers are skewed somewhat but not in the way you are implying. The US punches FAR above its weight in producing pollution even in spite of substantial amounts of regulation aimed at curbing it. The US is the second largest producer of carbon emissions right behind China despite having 1/4 the population. The US produces far more carbon than India in both absolute and per-capita numbers despite have a far smaller population.
Per capita is useful for some things and to get an idea of a broad idea but using it as the end all be all comparison is not accurate in the slightest. It doesn't tell you what is polluting more.
That's true but what it does tell you is how heavy the footprint is relative to the expectations given the number of people. You should expect a country with a larger population to have a larger absolute pollution footprint, all other things being equal. Per-capita numbers tell you when a country is allowing some (or all) of their population to pollute more than is reasonable given the size of the population.
Maybe. But shouldn't a business be able to make that decision for itself?
The answer depends on whose interests are important: short-term vs. long-term, corporate vs. societal/national interests . The actual decisions of a company in the absence of governmental interference are based on short-term stock price appreciation, even if such decisions eventually lead to the demise of the company. For example, if a US company partners with a Chinese company and is forced to share trade secrets, the executives and stockholders of that US company benefit based on increased revenue and stock price appreciation. However, eventually that company will face increased competition from that Chinese company and see decreased revenue in the long-term.
Unfortunately, the compensation structure of almost all US companies incentivizes short-term performance over long-term performance. Because the health of US companies greatly influences societal and national interests in the US, the US government steps in to prevent actions these short-sighted actions. Perhaps what the US government should do instead is to mandate that corporate executive compensation be geared towards compensation based on long-term performance. If executive bonus weren't paid until ten years in the future, short-term cannibalistic decisions to share IP with Chinese companies, to off-shore work to India, to replace US workers with cheaper foreign workers, etc. might be rethought.
Yep. Use-it-here ... make-it-here. Ram merchantile-style tariffs up their azzwhole. Drive the IP-stealing Peking slants back to ... Peking. Snatch away all the H1-Bz and fatcheck post-docs; we do not need them. Let spyboi chi.coms breath Peking smog & eat dog-infested RAMAN !
Ummm you are aware that the US is the biggest polluter per-capita in the world of any major industrialized country, right?
Didn't know Canada and Australia weren't major industrialized nations.
First it was most polluting, but the facts eventually entered public perception.
Now the goalposts have moved to per-capita, because the facts have not yet entered public perception. Even as the US is one of very few countries in to have ever decreased their greenhouse gas output while the strong talking Paris agreement signers steam on ahead with increasing theirs.
Watch the goalposts shift again to total historical output, then total per-capita historical output.
The end result is clear: whatever makes the US the big-bad will be treated as the new doubleplusgood truth. Watch sjbe stay at +5 and I stay at 0 or -1. Damn the facts. Damn reality.
This is a good thing. We need more locals to help out locals. I don't trust the Chinese. They are political and economic adversaries, and we should treat them as such. I'd rather do business in Mexico anyway. They are much happier and more friendly. And fuck you if you think that's racist. Facts are facts.
Your neighbor breaks into your garage and steals everything that they can get their hands on and then wants the keys to your garage. Do you trust them to not steal everything that they can get their hands on again? I don't. But that's just me.
The trick is to target the tariff at any manufacturing not to western standards.
And that is just kicking a can down the road. What make you think that moving manufacturing out of China to somewhere else where the cost can be low would force the new place keeping up the "western" standards? The only place where you can keep the manufacturing cost low is in a 3rd world country. What make you believe that the country will hold the moral of the 1st world country? Why do you think those 3rd world countries don't become 1st world countries? I will give you a hint, the rich has power and money and the poor just try to survive. Please keep looking for the new place where it can keep up the "western" standards as you claim.
Nothing new or newsworthy here. Chinks are parasites. USA is a shallow lie of freedumb. We know...
heard NPR at last report on all the Chinese gov't spying going on (although they did not mention that there have been OVER 4 billion hacks into public and private sectors in North America since 2010 (I stopped counting awhile back when it reached over 4 billion). Sadly, when NPR FINALLY reports something, you know it's gotten too late . . .
Chinese investors are pulling out because Chinese developers are cheaper, the typical silicon valley web app is not difficult to implement, and the Chinese market is bigger anyway.
Right, but that's not what the tariffs are about. If the tariff was implemented with the reason "poor worker rights, poor environmental record, abuse of IP", then that would send a specific message. However with the current tariffs to China the message is "we had the worst deal ever in the history of mankind, so unfair, sad, so tariffs until you agree with me!"
Ie, the message that China has been given is that the US is a bit unstable and unpredictable so just hold out for another election or two...
this is true only if you have someone else to copy from. We'll soon reach the point where the only thing left for china to do that will allow them to expand is to innovate and create their own tech, and at that point it's sink or swim. Certainly I don't think they'll be able to expand at anywhere near the rate they'll need to.
I am APK the great "LORD of HOSTS", a.k.a. AlecStaar from ArsTechnica or Alexander Peter Kowalski.
I am the godlike creator of various GUI front-ends for other people's configuration files.
When people state the truth about me I get really mad and accuse them of projecting which is something I do all the time.
Don't call me out on anything unless you are willing to prove you too can write some strings to a file programmatically
Watch as I claim I win every argument when in reality I know I lost but that won't stop me from proclaiming my victory.
When presented with facts I rebut them with wild speculations, false support, and out of context quotes
All of my accomplishments revolve around me being proven to be an annoying spamming asshole
See me be proud of my inability to be a functional adult
Bask in my debilitating mental illness
Witness my descent into madness
APK
Fact: u WISH u were me vs. being the "ne'er-do-well" DO-NOTHING u are STALKING me by UNIDENTIFIABLE anon posts.
* Your JEALOUS is SHOWING puny "Lil' Jowie", lol!
APK
P.S.=> QUESTION: What's it LIKE being a no-good worthless WEEZIL like you? It's gotta suck is what, lol... apk