21 ms·
Chinese Cash Is Suddenly Toxic in Silicon Valley, Following U.S. Pressure
- lallysingh 7y agoUnlaundered Chinese cash, of course. Hop it through an "investment" somewhere else and suddenly it's the investment arm of a multinational REIT.
- aswanson 7y agoDampens direct influence proportionally, though. The "cleaner" the money is, the more difficult it is for nefarious sources to dictate terms of use to the end user.
- Leary 7y agoWhat is the legal basis, if any, for getting rid of your investors for this or other reasons?
- mediaman 7y agoThere isn't. In order to get rid of an existing Chinese investor, you have to work out a deal. If the investor really likes their investment, the terms will have to be fairly attractive to the investor to exit.
- C1sc0cat 7y agoI would expect that there are national security laws that could be used if not explicit nationalisation.
- umeshunni 7y agoThere's no legal basis. It's just Xenophobia.
- wavefunction 7y agoIt could be xenophobia. It could be money laundering regs. It could be "national security concerns" which may be xenophobia or may be legitimate.
- User23 7y agoToo bad none of us can actually read minds, so we'll never know. If there's a charitable assumption about the state of someone's mind that the facts don't contradict, then it should be taken. It's funny how many people are emotionally attached to the delusion that they are psychic. I honestly wonder where they got that idea.
- aclsid 7y agoNah, nobody is complaining about Taiwanese or Japanese investment, so that is moot point, mostly made by Chinese from the continent when things don't go their way.
- sangnoir 7y ago> Nah, nobody is complaining about Taiwanese or Japanese investment, so that is moot point... FYI: xenophobia =\= racism
- elefanten 7y agoI don't understand the point of this FYI. GP's logic applies to both and answers both.
- sangnoir 7y agoOne can be xenophobic against a nationality without being racist against a race that happens to be predominant in the said country. You don't have to be racist against asians (incl. Japanese and Taiwanese) to be xenophobic to the Chinese. Parent only provided for proof against racism - not xenophobia, which is why I noted the difference. I am not commenting on the absence or presence of either racism/xenophobia in this particular case: I'm only noting an important difference.
- inflatableDodo 7y agoMany people critique the system of global capitalism, however 'can we please return to feudalism', is not generally what most of them were meaning.
- surge 7y agoChinese investment means increased pressure on tech oligopolies* to increase censorship of media critical of China. They've been branching out to increase soft influence, keep news sites and Olympic committee from recognizing Taiwan as a separate nation. Then there's what is currently going on in Hong Kong. Chinese investor cash is effectively Chinese government investment. It's not a good thing. *edit
- 1-6 7y agoHow much of it is hype though? Tencent invested $150 million into Reddit but all I read on FP are Hong Kong demonstrations and Tank Man.
- r00fus 7y agoThe idea is that successful message control will be subtle to imperceptible at first, but through successive actions it will just become commonplace to "not diss China". If Reddit is the "forum of the internet" then it won't matter if it slowly erodes into a Fox News like media presence. It will exert the gravity over other forums through its "reasonability" on non-sensitive topics. Kind of like how most modern politicians don't say anything bad about Israel.
- kamfc 7y agoThe shift can influence on easy a admin/mod will ban certain thread and comments if content "diss China". Again, like how the action of Israel is rarely (never) mentioned by politician.
- ulfw 7y agoDo all of you have WSJ and NYTimes subscriptions? I can't read any of those links submitted quite frequently
- rhino369 7y agoI get them through my employer.
- ishikawa 7y agoWhen is WSJ I don't even click anymore.
- lagadu 7y agoI just flag them and move on. Your garbage site doesn't want me reading it, I won't.
- rchaud 7y agoIt's precisely because the WSJ has a paywall (since 2007 IIRC) that it's not a "garbage site". That dubious honour would go to the hordes of medium.com and elektrek.co links who give their information away because, well, exposure is better than nothing. You get what you pay for.
- rconti 7y agoIt's still annoying. I subscribe to the NYT and WaPo. I can't even logistically subscribe to every news site I might get linked to. WSJ is the most obtrusive I've seen in terms of being restrictive towards non-subscribers. And there's STILL no micropayments solution that's widely adopted.
- ishikawa 7y agoThat is an interesting point. The reason I don't subscribe to NYT and WSP is that they don't have a 1-click cancel option.
- antiviral 7y agoHere is a snippet of the article, which I am posting under the Fair Use Act (I think you should all consider a subscription): "Silicon Valley startup Pilot AI Labs Inc. signed a Chinese-backed venture-capital firm as its first big investor. By last summer, Pilot AI wanted it gone. The U.S. startup hoped to sell more of its artificial-intelligence software to the U.S. government after working with the Pentagon, according to people familiar with its operations, and worried its effort could be hurt by the investor’s ties to China’s government. The chairman of the Chinese-backed investor, Digital Horizon Capital, was asked to sell back its stake, said one of the people. He angrily refused. Chinese investors were once embraced in Silicon Valley both for their pocketbooks and their access to one of the world’s largest and trickiest markets. Today, they are suddenly less welcome. Since late last year, amid rising U.S-China tensions, venture firms with China ties have been dialing back their U.S. investments, structuring deals in novel ways to avoid regulators or shutting their U.S. offices. Some American venture firms are dumping their Chinese limited partners or walling them off with special structures. And some U.S. startups that have taken significant Chinese money are keeping the investments quiet or trying to push their Chinese investors out to avoid scrutiny..."
- PakG1 7y agoThat's a horrible example. Of course that's not going to wash. Of course an investor would not be willing to sell back their stake before seeing the return they were looking for. If they wanted to sell AI software to the US GOVERNMENT, they should have found US investors. If they couldn't, then investors from US allied nations. They should have seen this coming a mile away, no?
- jeremyjh 7y agoOur relationship with China looked a lot different in July, 2016 when they took that investment.
- elefanten 7y agoEhhh.. no, not really. Not to anyone watching China beyond what appears in the mainstream headlines. Things have been on a strong downtrend since 2012 and alarms have been ringing loud since around 2014. Edit: Anyone writing a business plan including sensitive technology sales to the US government should DEFINITELY have seen this coming in 2016. Edit2: Also, candidate Trump had loudly been yelling about China for over a year at that point
- rawrmaan 7y agoGood. We raised Series A from Chinese investors a few years ago and they were toxic. Not to mention the political implications of enriching countries like China and Saudi Arabia. In hindsight would have rather closed up shop than taken their money.
- cheez 7y agoToxic how?
- omginternets 7y agoCould you elaborate? What made it toxic?
- internet_user 7y agoYes, please elaborate. +1
- bduerst 7y agoNot GP, but I've pitched to a crossover fund from China and they were super seedy. On top of having a questionable website and other investments, one of the red flags was they wanted their engineers to review our source code before/without signing any NDAs or commitments.
- kirubakaran 7y agoYou were surprised that China has red flags? (Thank you, I'll be here all week)
- sniperjzp 7y agoReminds me of Reddit, Uber, Tesla and Snapchat (well, LA based), they have large portions of Chinese investment.
- chewbacha 7y agoIn conjunction with the trade wars and increasingly hostile posturing between leaders, I'm nervous that the ultimate consequence may be war between super powers. If raising the number of trading partners decreases the likelihood of war, decreasing may increase it's chance instead. https://phys.org/news/2015-12-partners-wars-nations.html https://phys.org/news/2015-12-partners-wars-nations.html
- elefanten 7y agoThere's been no change in number of trading partners as a result of the trade war. Also worth noting that the claim is more trading partners lowers likelihood of war. War can still happen. At some point, economic interdependence cannot save a situation where two sides desperately want to change/preserve the state of something (about the world) and those desires come into conflict. IMO, with US-China, the best inoculation against war would be to push for multilateral engagement... in either direction. But speaking from the US side, US needs to bring other countries into the efforts to reform the aspects of the CCP's behavior that are unacceptable long term.
- Rapzid 7y agoThe EU is acting after what has come to light in New Zealand, Australia, and Africa. Unfortunately it appears they are acting separately because we are such great friends these days /s . A lot of people only familiar with the surface link this to the trade war and Huawei, but those are largely reactions to the scope and reach of China's propaganda, control, and soft-power efforts that have been coming to light over the past few years. Ultimately I believe these are all symptoms caused by a fundamental incompatibility between China's "communist", fascist government and the liberal democracies of the world. Unless that can be reconciled, which I don't believe it really can, everything else is just managing for time.
- Causality1 7y agoEven if the Chinese government never interfered with a single company, I don't want Chinese corporate culture "leeching into the groundwater" as it were. They put Europe and the US to shame when it comes to not giving a damn. About safety, the environment, intellectual property, you name it.
- scarface74 7y agoAnd US venture capital cares about feeding starving children in Africa and other ways to make the world a better place?
- mooseburger 7y agoThat's just a tu quoque fallacy, as venture capital being indifferent to making the world a better place does not mean it is ethical to do business with China.
- kmlx 7y ago“does not mean it is ethical to do business with China.” what kind of business?
- mooseburger 7y agoIf it's up to me, doing any business that aids the Chinese government is unethical.
- entropea 7y agoWhy though? You could just make a bunch of whataboutism's that prove the USA has the very same horrors that China does in its own economy. Why the double standard? As someone pointed out above, this seems like xenophobia and not much else. They don't pose a war threat and any war would be initiated by USA.
- 7y ago
- parliament32 7y agoWhy would you post the paywalled version of the link? https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-in-silicon-valley-following-u-s-pressure-campaign-11560263302?mod=rsswn https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-...
- scarface74 7y agoWhich is amazingly hypocritical coming from the same administration that just passed a tax cut that will get us deeper in debt with much of that debt being held by the Chinese government.
- wrong_variable 7y agoWhich can be wiped out by printing money in QE4.
- scarface74 7y agoAnd bad things never happen when countries start printing more money to pay off debt....
- dang 7y agoPlease do not take HN threads on generic flamewar tangents. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- scarface74 7y agoI usually don’t reply to moderators but these are simple economic facts. 1. A law was passed that meant we take more money than we bring in. 2. When you spend more than you bring in that causes debt. 3. China holds much of our debt. Which part of that is factually incorrect? I would have made the same comment about a Democratic President. If you look at my posting history, I routinely bemoan the celebration of unprofitable business models. This is no different. And below someone had the great idea of printing money. I also responded with facts implying this leads to inflation. Btw, which part of a submission about “evil China” isn’t a flame war tangent?
- dang 7y agoFacts aren't neutral; people choose them, and there are infinitely many to select from. If you bring in ammunition for a political argument, and that swerves the thread into a generic political lane, that's bad for HN even if the ammunition is factual. Please don't do that here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- ffn 7y agoI'm all for openness and transparency, but wouldn't an increase in US refusal to play with China just lead to more censorship and oppression by the communist Chinese government? Consider the following: 1. The Chinese communist government derives its legitimacy to rule almost exclusively from its massive economic growth (i.e. Chinese citizens and corporations are effectively saying to themselves "I'm ok to trade some of my human rights for lots of money") 2. The Chinese communist government wishes to remain in power So if the US decides to target Chinese economic growth - i.e. lower the amount of money that an unit of human rights could buy - this should cause the Chinese citizens and corporations to respond by exercising the human right that the Chinese government is no longer able to buy with growth. In turn, this would cause the Chinese government to use alternative methods (i.e. straight-up oppression by force) to prevent the Chinese people from becoming unruly. This sort of pressure on the Chinese government may lead to reform (which is indeed a good thing), but it may also lead to civil / politic unrest and a massive economic slow-down that will have aftershocks around the world (which is certainly less than ideal) - and all of this pretty much will depend on how Xi decides to handle this pressure. Here in the US, We should at least recognize that this is a risky move and take measures to protect ourselves against this (somehow)
- nine_k 7y agoI would like to remind that the Soviet regime was defeated by economic issues. I think the only reason the CPC regime might change is due to economic problems. The more abrupt they would be, the better: people need to remember better times and demand change to get back there — including people at higher positions in CPC itself. Remember how the "cultural revolution" fiasco led to serious liberalization and eventually to the "economic miracle".
- fmajid 7y agoChinese growth was slowing anyway. Now they have a convenient scapegoat for that, big bad America. The long-term consequences of deep hostility against America in the general Chinese population are hard to predict, but they are not going to be favorable to us.
- peterwwillis 7y agoThis is the turning point where tech has become a munition again. Rather than export controls, it's business blacklists. It's a weird switch. Before we would sell billions in arms around the world with little risk of it being used against us. But digital munitions can be used against anyone, anywhere, any time. The USG will have to tightly control all tech used in the country to prevent cyber weaponry being used against us.
- devy 7y agoFor those who claimed Chinese cash is toxic, let me ask you an important question: what about Softbank's cash that primarily coming from Saudi? What about the Ivy League schools' endowment money donated by "morally unethical"(including but not limited to middle east) sources? Are you not going to send your children to Ivy League schools?
- robbrit 7y agoJapan (where Softbank is from) and Saudi Arabia are not geopolitical rivals to the USA. China is. This isn't about morality.
- techer 7y agoNational security Vs not
- leroy_masochist 7y agoI think the assertion that Chinese cash is toxic is not so much because of bad things that Chinese do to their own citizens; it looks like the point you're trying to make is that Saudis : Khashoggi and gay people :: China : Uyghurs and Tiananmen, or something of that nature. Rather, the claim of toxicity stems from the perceived tendency for Chinese investors to be difficult LPs and steal intellectual property both pre-deal during diligence and post-deal once they are in the capital structure. There's an additional perception of 'toxicity' in terms of the way that having Chinese investors might limit a company's ability to procure US Gov contracts, which is getting tighter under this administration, as described in the article. The comparison to sending your kid to an Ivy League school makes no sense to me whatsoever, seems like a total non-sequitur.
- elefanten 7y agoNo reason for this to be downvoted. IP theft/strongarming and sales opportunities are the more likely concerns from the entrepreneur/business side. Some people are taking the moral stance, but TFA lines up with parent comment well
- gnome_chomsky 7y ago
- layoutIfNeeded 7y agoI always laugh whenever I remember how Zuckerberg was pandering to the Chinese, like insisting to poorly speak Mandarin on some QA panel with Chinese students and such. The times they are a-changin!
- darkpuma 7y ago> " like insisting to poorly speak Mandarin on some QA panel with Chinese students and such." That's peanuts; check out this: https://www.telegraph.co.uk/news/worldnews/asia/china/11910668/Chinese-president-snubs-Mark-Zuckerbergs-request-for-baby-name.html https://www.telegraph.co.uk/news/worldnews/asia/china/119106... > The awkward moment reportedly arose when the Facebook founder, speaking in Mandarin, asked Mr Xi if could would honour him by giving his unborn baby daughter an honorary Chinese name. According to sources, Mr Xi politely declined, saying it was “too much responsibility”, reported Page Six, a celebrity news site for the New York Post.
- DeonPenny 7y agoyeh a lot of people did this and none it worked. Now china has no allies in business
- tibaiiplus 7y agoWriter of the article here. Totally get the frustrations with paywalls. Bottom line is feature stories like this take weeks, months, sometimes a year or more to produce. Sites without paywalls have to go for clicks (which are worth close to zero now that Google/Facebook gobble up most online ad budgets). If low value clicks are all you have, you end up like dailymail.co.uk. If you want high value news, you have to pay someone a reasonable salary to report/write it. Anyway, hope you enjoy and here's another fun part of the story: The FBI office has conducted hundreds of briefings for companies on cybersecurity threats and economic espionage. It discourages people from using their regular smartphones and laptops when traveling in China and warns male U.S. executives to avoid “honeypot” espionage attempts by attractive women. “If you’re not a 10 in the U.S., you’re not a 10 in China,” officials say they’ve told the executives.
- elefanten 7y agoHa, good line. Thanks for hopping in to engage here, where paywalls are met with hostility. I appreciate both sides of this argument. But thanks especially for the reporting!
- tibaiiplus 7y agoMy pleasure. And btw: the best way to support the news is to share really good tips! Always on Signal for that as you can see from my Twitter handle: @rolfewinkler. ;)
- antiviral 7y agotibaiiplus , Thanks for an excellent article. Are you planning any follow-ups on this topic? If so, would you like to be contacted with possible leads?
- tibaiiplus 7y agoAlways looking for leads. You can hit me up on Signal 847-380-0751
- stcredzero 7y ago
- fmajid 7y agoI'd be more concerned about Chinese financing of Hollywood. Nearly every big-budget production these days has Chinese co-producers. This leads to farcical episodes like the remake of Red Dawn featuring feeble North Korea as the villain rather than China as originally envisioned.
- learc83 7y agoRussia was the villain in the original movie and China was on the US side (but were only briefly mentioned). Or do you mean "as originally envisioned for the remake"?
- deleted 7y ago[deleted]
- etrma 7y agoIt's not like Hollywood is currently controlled by America. ;-)
- Buldak 7y agoPart of me thinks that competing propaganda might actually be salutary.
- rhcom2 7y agoI think the Red Dawn example reflects more on the power of the Chinese box office than any financing concerns. It's just too big to ignore.
- inflatableDodo 7y ago
- kmlx 7y agochina owns 5.6% of US national debt. does this make US debt toxic?
- citilife 7y agoThe reverse is also happening and is a way bigger deal. Resources are also being pulled out of China, as U.S. companies have spent the last several decades plowing tens (if not hundreds) of billions into China a year. It'll be a fairly large windfall coming out of China as well. To India, Mexico, Taiwan, the United States, etc.
- bjourne 7y agoWhy is it ok for US companies to plow billions into China, but not for Chinese companies to plow billions into the US? Seems like a double-standard.
- jjeaff 7y agoProblems with the overreach and missteps of the US government aside, the US is not systematically silencing its critics through censorship and forced work camps. And the human rights record of China is abysmal in comparison to the US. To think the two are comparable is just head in the sand at this point.
- bjourne 7y agoI agree with you. But that was never an issue when US companies invested in China. It appears that cooperating with authoritarian regimes is fine as long as it is your nations companies that comes out on top.
- jjeaff 7y agoYes. I definitely want the companies of the US to come out on top. Or the companies of any country that has a decent human rights record.
- throwayEngineer 7y agoI'd gladly accept their money. My company automates things, not creates economic or political policy.
- julienfr112 7y agoDon't they use the dollars they receive to finance the negative US balance of trade ? Is the dollar toxic ?
- Theodores 7y agoWhen you have a global currency that all other currencies are measured in and all oil is bought in, what happens to a country that has economic surpluses? They have to buy dollars. What happens if countries want to buy dollars? The U.S. government (well, the Fed) has to print them. If you look at the balance of trade and look at the dollar as a printed thing, the US is very good at getting the rest of the world to buy their dollars (that can be just printed or magically made on a computer screen) and getting real stuff in return. I wish I could print money and get boxes of nice shiny iphones, shoes and other trinkets. I think this is a pretty successful exploitation model. The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation. Apart from anything else, if another country decides to dump its dollars then if that did cause inflation in the US then that would devalue their remaining holding. Meanwhile the US can spend as much as it wants on gunboats and the like to enforce this hegemony. If you benefit from this system, i.e. by being an American, then the dollar is far from toxic. If you are a farmer in a developing nation trying to sell wheat then your view of the dollar may be different.
- muricula 7y ago"The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation." I think this part is wrong. When overseas oil companies get the dollars they are going to spend them, otherwise they wouldn't sell in the first place. If the economy worked the way you suggest I think we would see inflation from those dollars sent overseas for oil etc.
- Theodores 7y agoThis article introduces a new term 'structural' for describing the US trade deficit. Essentially if a country is to have their currency as the world's reserve currency then they have to run at a deficit. Since all those extra dollars that get printed go overseas they are not in the US economy to cause price inflation, i.e. too much money chasing too few goods. https://qz.com/1266044/why-does-the-us-run-a-trade-deficit-to-maintain-the-dollars-privileged-position/ https://qz.com/1266044/why-does-the-us-run-a-trade-deficit-t...
- maerF0x0 7y agoAnecdata time: In 2012 Canada allowed the sale of Nexen (an oil company) to CNOOC. CNOOC management promised they would keep the staff in Canada, the management local etc. Fast forward 7 years later and it's a ghost town, they cite "business need" but somehow all the jobs have moved abroad and the only thing remaining in Alberta is a resource pump sending all the value abroad. This comment is not intended to be about racially Chinese people, but the constantly malicious and negative behavior of the communist government in China.
- majia 7y ago7 years is really a long time and there is likely to be some real needs to adjust business operation. If the deal doesn’t specify a duration to keep jobs in canada, you can’t reasonably expect it to be forever. CCP has done horrible things, but it isn’t really a CCP specific behavior; any greedy capitalist would have done the same.
- fjp 7y agoYeah this is basically what every American company does after extorting some town or state for preferential tax breaks
- maerF0x0 7y ago> you can’t reasonably expect it to be forever Why not? The resource is still coming from Canada, they still need these employees. They're just shifting the jobs to China.
- jorblumesea 7y agoSo long as Chinese money comes with so many strings attached (political concessions, IP transfer) this is good for the US and US companies. Hard to imagine a country where investing comes with so much additional baggage.
- entropea 7y agoCould somebody explain to me the vicious American hate for China from a totally uninformed viewpoint? Any links to read why I should also dislike China?
- yourbandsucks 7y ago“It was the rise of Athens, and the fear that this instilled in Sparta, that made war inevitable.”
- jorblumesea 7y agoI don't think being suspicious of a country that has its citizens in literal concentration camps is "vicious hate". It's not a bad thing to turn a critical eye towards authoritarian states and questions their money and motives. Likewise, people should be critical of the US and its role in human rights violations. https://en.wikipedia.org/wiki/Xinjiang_re-education_camps https://en.wikipedia.org/wiki/Xinjiang_re-education_camps https://www.france24.com/en/20190510-reporters-plus-surviving-china-uighur-camps-repression https://www.france24.com/en/20190510-reporters-plus-survivin... https://www.washingtonpost.com/opinions/global-opinions/the-west-ignored-crimes-against-humanity-in-the-1930s-its-happening-again-now/2019/02/15/d17d4998-3130-11e9-813a-0ab2f17e305b_story.html?noredirect=on https://www.washingtonpost.com/opinions/global-opinions/the-...
- entropea 7y agoUSA has 2.3 million incarcerated and prison slavery is legal under the 13th amendment, a lot incarcerated based on race and for very small crimes. A lot of those prisons also have very rough conditions and prisoners are exposed to violent and inhumane treatment. This is extremely unethical. Why is this any different? Companies send their work to these prisons for literal slave labor and I never see anyone up in arms about it. Not many seem to be critical of their own government, but love judging other governments. https://www.prisonpolicy.org/reports/pie2018.html https://www.prisonpolicy.org/reports/pie2018.html
- z0r 7y ago
- rhacker 7y agoI doubt it. During the Khashoggi thing it turned a few heads but most businesses just stayed quiet for the few months it was a thing. Now biz as usual. I would expect that the same is happening for China money. Hush hush until we get out of the cloud.
- DeonPenny 7y agoThe difference is that was just social pressure SA is still a US ally. China is not and given elections are coming up China will a huge talking about and looks to be approaching war on drugs level brinkmanship.
- dawhizkid 7y agoAnyone else paranoid about TikTok (owned by Chinese co ByteDance)? The fact that it's basically a video recording app it's hard to believe there isn't a backdoor to it.
- potatofarmer45 7y agoIt's not just Chinese investors, even having large Chinese customers raises red flags during BD work for us. We provide a SaaS for data analytics and often we hold a copy of the client database to provide rapid answers to queries. We were recently finalizing a deal with a US based retailer when it came out that we worked operated in China and the tone of the conversation shifted immediately. They literally sought all manners of guarantees on data security and storage that were unnecessary, but due to the current climate, seems to make everyone paranoid. Now we have to specificlly mention in our integration docs that when we do multi-zone backups, none of those backups are in China. They never were, but now we have to be explicit because it's coming up in so many of our conversations. Our pilot with the Chinese company ends in November. We are seriously considering terminating the deal because it's trending towards the case where we can either have China, or Non-China markets. Not both.
- singularity2001 7y ago>> Now we have to specificlly mention in our integration docs that when we do multi-zone backups, none of those backups are in China. Similarly I've seen docs which explicitly mention that no EU data is backed up to the US
- duxup 7y agoThat doesn't seem too unusual to me. I worked with US and European financial institutions who regularly requested / needed guarantees that data (not necessary financial data, all sorts of data), who had access to what, and etc. Most of it all seemed design to ensure that the things / company / people were within a reasonable legal context, sometimes that context was just what country the data was in, the people who worked on it. Laws provide everyone a framework to know how things might play out if something goes wrong, if someone is in a country that generally doesn't respect those laws all rules are out the window.
- pessimizer 7y agoSaudi And Emirate Cash Still Cool, Though
- neonate 7y agohttp://archive.is/urxAO http://archive.is/urxAO
- ETHisso2017 7y agoIt's interesting: Chinese cash is welcome in real estate and the US treasury market. What is it about startups that makes the government concerned?
- mark_l_watson 7y agoI think I know why: in the USA we require growth in housing and the stock market to keep things together, to keep the system running. Our government is worried about competition in tech, not investment in our equity markets. One is viewed as harmful, the other we depend on. I am disappointed by this entire affair. I like to see each country have its own culture and uniqueness, but I would like the world economic and tech engines to function well for everyone. Even playing field.
- roymurdock 7y agoChina buys US debt so it can peg the Yuan to the dollar to keep volatility low and manage its export levels accordingly. China only owns 5% of outstanding US national debt, so even if they sold it off in a flash sale for some reason, someone else would buy it (other nations or more likely the Federal Reserve). Selling off US debt is not a credible economic threat for China. [1] No powerful US entities have a vested interest in keeping foreign Chinese money out of US real estate, especially if it's due to wealthy individuals investing abroad. The real estate owners win, the developers win, construction companies win, the mortgage-underwriting banks win, the losers are the young/renters/non-capital owners seeking jobs in these hotspot areas because their rent just goes up and up per square meter. This segment of the population has no political power, they can only hope to make enough to put a down payment on a house and join the vested interests as capital owners - hopefully the bubble doesn't burst taking their job and leaving their mortgage underwater. The exception here would be if a Chinese government-owned investment vehicle tried to purchase large swathes of real estate, it could potentially use this large investment as a weapon to control cost of living/tank real estate values in that area if the government wanted to. The real reason is because US technology (networking, telecom, A&D, automotive) companies have a huge vested interest in keeping their competitive advantage over Chinese technology companies which are on the cusp of transforming from cheaper/lower quality alternatives to preferred suppliers in building out information technology infrastructure globally, including in the US. The US government also has a huge vested interest in controlling this infrastructure, especially in the US, or at least being on good terms with the companies that build and manage it. It doesn't want partially government-owned and directed companies like Huawei supplying complicated and sometimes unvettable hardware and software over which Americans send each other vital information. [1] China's central bank uses a modified version of a traditional fixed exchange rate. That's different from the floating exchange rate the United States and many other countries use. The People's Bank of China manages the yuan's value. It keeps it fixed to a basket of currencies reflecting its trading partners. The basket is weighted toward the dollar since the United States is China's largest trading partner. It keeps the yuan's value within a 2 percent range against that currency basket. Why does China fix the yuan's value to the dollar? It manages its currency to control the prices of its exports. It wants to make sure its exports are reasonably priced when sold in the United States. Every country would like to do this, but few have China's ability to manage it so well. China's command economy allows it to control the central bank and many businesses. As a result, the Communist Party directs China's economy. The U.S. government regulates exchange rates instead of managing them. https://www.thebalance.com/how-does-china-influence-the-u-s-dollar-3970466 https://www.thebalance.com/how-does-china-influence-the-u-s-...
- dmode 7y agoHey, Chinese money is bad. But Saudi money is more than welcome. 50% of Softbank's vision fund is from Middle East sovereign funds, who have even more brutal censorship laws and commits more brazen human rights policies. US policy is completely incoherent and probably explained by who pays the bribes to Whitehouse vs. any legitimate principles.
- chibg10 7y agoIt helps that SA isn't really a risk to export its censorship (among other ills) to the US in the near future. I generally sympathize with the position of rejecting Saudi money where possible, but it's inaccurate to frame US policy towards China in purely moral terms. In the case of China, there's a lot of ideological self-interest at stake for the US.
- felipelemos 7y agoIt's not incoherent, because the issue with China never was about human rights or censorship.
- hassancf 7y agoChina is a threat to US economic supremacy. And now they want to become independent from US technology etc... the US doesn’t see it that way. Saudi Arabia and the other Gulf states are vassals of the US. Not exactly the same level of threat if you ask me
- itsaidpens 7y agoThere are massive externalities to Chinese influence from a culture of a city/state side. I think this is a good thing.
- hummel 7y agoMake SV Great Again
- pigscantfly 7y agoRegardless of the wider debate, it's very sad to learn that Shoucheng Zhang decided to take his own life. He was the only VC I've ever had a legitimate, deep technical discussion with, and I respected him as a scientist.
- codephined 7y agoChinese cash may be toxic in Silicon Valley, but not in Silicon Wadi! Which is why we're deliberately transferring our high-tech sector to Israel. None of this makes any sense for America.