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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
making stuff in red china with poor IP laws is bad as well.
Kick out these fucking spies.
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.
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.
Here's the CO2 numbers for US, EU, and China, as of 2017: https://www.forbes.com/sites/r...
Over the past decade, the US and EU reduced their footprint. Meanwhile, China tripled theirs, and now emits more carbon dioxide than the U.S. and EU combined.
According to eia.gov https://www.eia.gov/todayinene... "Coal accounts for most of China's energy consumption, and coal has maintained an approximate 70% share of Chinese consumption (on a Btu basis) since at least 1980, the starting date for EIA's global coal data. By way of comparison, coal was 18% of U.S. energy use and 28% of global energy use in 2012."