US Venture Investment in China for 2019 Expected to Drop to Six-year Low

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A new study points to a sharp decline in US venture investment in China amidst unresolved trade tensions between the two nations.

A report published by the Rhodium Group and the National Committee on US China Relations on Monday estimates that the volume of US venture capital investment in Chinese start-ups fell to under USD$4 billion for 2019.

This compares to a peak of $17.4 billion in 2018, and marks the lowest level of US venture investment in China in a six-year period.

The report called for the US government to “avoid disruption and unproductive decoupling without purpose,” and moderate restrictions on China’s access to the American tech sector.

“Leaders must weigh marginal increases in national security against the economic and security costs of limiting participation in the US technology sector,” said the report.

According to the report China and the US have completed 5,000 investment deals worth around $66 billion over the past two decades.

Out of the $300 billion in funds raised by all Chinese start-ups over the past two decades, US venture capital funds and corporations have made a contribution of around $47 billion, or around 16% of the total.

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