Trump’s trade war did not stop venture investment in China

President Donald Trump and the US government are neck-deep in a trade war with China. Yet US businesses and investors pushed more venture capital investment into China in 2018 than ever before. Though Trump has added tariff after tariff on the country, America’s private sector doesn’t appear to share the same urge to punish or restrict the growth of companies in China. Likewise, China’s venture capital investment into the US continues, albeit at a somewhat slower pace.

According to the South China Morning Post, USD-denominated capital raised for Chinese investment burst upwards by 125% last year, compared to 2017. The figure reached $15.5 billion and formed 35% of the market. In 2017, USD-denominated investments were lower at 28.7%, according to Zero2IPO. Hui Wang, founder of Bolian Financial, says US investors have not been “affected as much by the domestic Chinese environment” compared to even Chinese venture capitalists themselves. He says: US venture capital has been increasing steadily.

The US-China trade war and the economic slowdown in China have made it tougher for new and growing companies in China. Despite the surge in US-based VC money, the total amount of both Chinese yuan and USD-based venture capital investment into China fell in 2018 by 13% to $44.5 billion. US venture capital investment flows into China could illustrate a so far unaffected private sector sentiment. But the Trump-led trade war, economic fears, and the Huawei dispute could change this in 2019. A drop in venture capital investment either to or from the US would be felt by innovative new companies on both continents.

Why Trump’s Trade War Hasn’t Stopped US Venture Capital from Piling into China, CCN, Jan 28