{"id":2021609,"date":"2023-09-04T17:28:01","date_gmt":"2023-09-04T21:28:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-china-tech-freeze-worries-us-investors-startups\/"},"modified":"2023-09-04T17:29:33","modified_gmt":"2023-09-04T21:29:33","slug":"us-china-tech-freeze-worries-us-investors-startups","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-china-tech-freeze-worries-us-investors-startups\/","title":{"rendered":"US investors and startups concerned about the US-China tech freeze."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-china-tech-freeze-worries-us-investors-startups%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2021609&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>The growing tensions between Washington and\u2064 Beijing are posing\u200d new challenges for American \u200dsmall businesses\u2062 and investors even as the two nations <a href=\"https:\/\/asia.nikkei.com\/Politics\/International-relations\/US-China-tensions\/U.S.-and-China-agree-to-new-dialogue-on-trade-chip-export-curbs\" target=\"_blank\" rel=\"noopener\">keep talking<\/a> about limiting their policy misunderstanding and easing the tech barriers, according to experts.<\/p>\n<p>U.S. founders and investors say \u200dthat when money is \u200bscarce, the new constraints on investments in advanced technology \u2062in both nations are \u200dexacerbating a slump in\u2064 deals \u200bbetween small- and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/president-biden-to-announce-multi-trillion-american-jobs-plan-in-first-address-to-congress\/\" title=\"President Biden To Announce Multi-Trillion \u2018American Jobs Plan\u2019 In First Address To Congress\">medium-sized enterprises<\/a> in the world\u2019s top two economies.<\/p>\n<p>\u201cThere is nothing bigger \u200bthan the current trade \u2064tensions between the U.S. and \u200cChina [for a U.S. investor], Gary Dugan, \u200bchief investment officer at the UAE-based Dalma Capital, a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-china-tech-freeze-worries-us-investors-startups\/\" title=\"US investors and startups concerned about the US-China tech freeze.\">global alternative investment platform<\/a> and an avid China investor, told The \u2064Epoch \u2062Times.<\/p>\n<blockquote>\n<h2><strong>Reduced Access \u2062to China&#8217;s\u2063 Tech Market<\/strong><\/h2>\n<p>As the world&#8217;s second-largest economy\u200b and one\u200d of the \u2063lucrative\u200b markets for emerging technologies\u2014such as artificial\u2064 intelligence, quantum computing, and biotechnology\u2014many U.S. investors have been drawn to China&#8217;s tech sector.<\/p>\n<p>According \u2062to KPMG\u2019s Venture \u2064Pulse\u200c report \u2064for the first quarter \u200cthis \u200dyear, for example, venture capital (VC) investment\u2064 in China totaled $7.4 billion as VC activity picked \u200dup in the second half of the quarter\u200b once\u2063 the COVID-19 wave diminished.<\/p>\n<p>However, the VC funding for startups in China dropped 44.8 \u2063percent year-on-year from \u200bJanuary to April, reaching $11.6 \u2064billion compared to $21.2 billion \u2063in the same period last year.<\/p>\n<p>While President Biden&#8217;s directive restricts U.S. investors&#8217; access to\u2064 China&#8217;s tech industry, Beijing&#8217;s retaliatory moves prevent U.S. firms from seeking Chinese \u200dinvestment or listing on Chinese stock\u200b markets for fear of being \u2063sanctioned or \u200cdelisted \u2064by the U.S. government.<\/p>\n<p>Chinese deals involving a \u2064U.S. venture capital\u200b investor\u200c were around $200\u2063 million\u2063 in the\u2062 second quarter compared to $2.4 billion in the previous \u200byear and $3.8 billion in 2019, before\u2064 the pandemic hit, \u2062according to PitchBook data.<\/p>\n<p>This has also limited U.S. investors&#8217; ability to tap into China&#8217;s\u200d technological innovation and talent base, said Karan Gupta, a Silicon Valley-based\u2062 serial investor and\u200c founder of AI-based\u200c startup Alice.<\/p>\n<\/blockquote>\n<p>\u201cPost the last U.S. presidential\u2064 election, U.S.\u200d investors were\u200c looking forward to a far less confrontational stance on trade issues from \u200bthe U.S. However, this has not come to pass.\u201d<\/p>\n<p>On Aug. 2, \u2063President Joe Biden issued an executive \u200corder restricting investments by\u2064 U.S. venture capital,\u200c private equity, \u200cand joint ventures in Chinese artificial intelligence, quantum\u2062 computing, and semiconductors.<\/p>\n<p>The order, which expanded a previous order\u200b by former President Donald\u2063 Trump, was part of the Biden administration&#8217;s broader strategy to counter communist \u2062China&#8217;s rising\u2062 influence and challenge its <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/israeli-owned-spyware-firms-blacklisted-by-us-commerce-department-over-national-security-risks\/\" title=\"US Commerce Department blacklists Israeli spyware firms due to national security risks.\">human \u2062rights abuses<\/a>, \u200ctrade practices, and \u2064technological ambitions.<\/p>\n<p>On the same day, \u2062the administration also expanded its review of Chinese investments, particularly those with possible military\u2063 uses or implications for national security.<\/p>\n<p>Responding to the U.S. \u200drestrictions with criticism, concern, and countermeasures, Beijing has <a href=\"https:\/\/www.reuters.com\/world\/us\/chinas-targeting-us-firms-is-politically-motivated-us-ambassador-says-2023-06-07\/\" target=\"_blank\" rel=\"noopener\">retaliated<\/a> \u200bagainst the measures by imposing sanctions\u200d on\u200d some U.S. individuals and \u2063entities, banning some U.S. companies, like Micron Technologies,\u200c from doing business in China, and launching an \u2064anti-monopoly probe into some U.S. \u2062tech firms,\u2064 such as like Deloitte, Bain &#038; Company, Capvision, and Mintz Group.<\/p>\n<p>Additionally, Beijing has imposed currency controls to limit capital outflow, making\u200b it harder for Chinese investors to \u200cfund U.S. startups.<\/p>\n<p>\u201cThe\u2063 restrictions placed\u200c on trade are\u2063 moving\u200b fast &#8230; provides little definition to how the U.S. and China will work with each other in \u200dthe future,\u201d said \u200cMr. Dugan. \u201cThe restrictions on [the] transfer \u2064of technology and \u200dthe flow of products\u200d and services, for instance, remain very \u2063fluid and open\u200c to many interpretations.\u201d<\/p>\n<p>Investors always struggle to anticipate and deal with\u200d political conflict between countries, said\u200d Mr. Dugan, and the\u2064 current tension is already \u2063creating a chilling effect for U.S.\u2064 investors who want to avoid regulatory risks or sanctions.<\/p>\n<div>\n<figure style=\"width:600px\" class=\"aligncenter\"><figcaption>The closed office of \u200dthe Mintz Group is seen\u2064 in an office building in\u2063 Beijing on March 24, 2023. &#8211; \u2063Five Chinese employees at \u2064the Beijing office of U.S. due diligence firm Mintz Group have\u2062 been detained by authorities, the company said \u200don \u2063March 24. (Greg Baker\/AFP via Getty Images)<\/figcaption><\/figure>\n<\/p><\/div>\n<h2><strong>Reduced Access to China&#8217;s Tech Market<\/strong><\/h2>\n<p>As \u2063the \u200dworld&#8217;s second-largest economy and one of the lucrative markets for emerging technologies\u2014such as artificial \u200cintelligence, quantum computing, and biotechnology\u2014many U.S. investors have been drawn to China&#8217;s tech sector.<\/p>\n<p>According to KPMG\u2019s Venture Pulse \u200creport for the first quarter this year, for example, venture capital (VC) investment in\u200c China totaled $7.4 billion as \u200cVC activity picked up in the second half of the quarter once the COVID-19 wave\u200b diminished.<\/p>\n<p>However, the VC funding for startups in China dropped 44.8 percent year-on-year from January\u2063 to April, reaching $11.6 billion\u200b compared to $21.2 billion in \u200cthe\u200c same period last year.<\/p>\n<p>While\u2063 President Biden&#8217;s\u2064 directive\u200d restricts U.S. investors&#8217; access to China&#8217;s tech \u200cindustry, Beijing&#8217;s retaliatory moves prevent U.S. firms from seeking Chinese investment or\u200c listing on Chinese stock markets for fear of being\u2062 sanctioned or delisted \u200dby the U.S.\u2064 government.<\/p>\n<p>Chinese deals involving a U.S. venture capital investor were around $200 million\u200c in \u200bthe\u2064 second quarter compared to $2.4 billion in the previous year\u200d and $3.8 billion in 2019, before the pandemic\u200b hit, according to PitchBook data.<\/p>\n<p>This\u200b has also \u2063limited U.S. investors&#8217; ability to tap into China&#8217;s\u200c technological innovation and talent base, said \u2062Karan Gupta, \u2063a Silicon\u2064 Valley-based serial investor and founder \u2064of AI-based startup Alice.<\/p>\n<h2><strong>Increasing Competition From China&#8217;s Rivals<\/strong><\/h2>\n<p>Nonetheless, while practical realities \u2062such as\u2064 greater regulatory scrutiny, a stalling economy, and geopolitical tensions are reasons investors and\u200b entrepreneurs are more cautious about China, competition from other markets \u200cis also prompting \u200dthem to look elsewhere.<\/p>\n<p>\u201cThere is a large enough global market, and other countries are willing to provide good\u2062 terms\u2014India [and] Vietnam for manufacturing, for example. Unless you have a business that must be in \u200bChina, \u2064you can avoid unnecessary scrutiny\u200b and worry,\u201d said Mr. Gupta.<\/p>\n<p>Indeed, China faces\u200c increasing competition from other countries in various domains, such as economy, technology, security, \u2064and diplomacy. Besides the United \u2064States, other rivals include India, Australia, Japan, and Russia.<\/p>\n<p>Especially in the South Asian region, India, which \u200cshares <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>the US-China relationship are making it harder for American small businesses and investors. Despite discussions on reducing policy misunderstandings and tech barriers, experts highlight the increasing challenges faced by US founders and investors due to limited funds and restrictions on investing in advanced technology.<\/p>\n","protected":false},"author":2383,"featured_media":2021610,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2021609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2021609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2383"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2021609"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2021609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2021610"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2021609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2021609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2021609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}