The 57-page report draws on information provided to the committee by the firms about their investments, as well as interviews with senior executives at multiple firms.
The committee’s report looked at just some of the funding flowing to China. Between 2016 and July 2023, Chinese semiconductor companies raised $8.7 billion in deals that included U.S. investment firms, according to PitchBook, which tracks start-up funding. That investment peaked in 2021.
Venture capital firms pursued aggressive global expansion, particularly into Asia, for several decades. But they have known since the Trump administration took a more aggressive stance toward China that investments in Chinese companies would be subject to increasing scrutiny.
“No one is touching China now,” said Linus Liang, an investor at the venture firm Kyber Knight Capital.
Splitting off investment entities with ties to China, as Sequoia and GGV did, may not resolve the committee’s concerns about American financing and technology ending up in Chinese companies, the report stated. Sequoia’s newly separated China-based firm, HongShan, counts U.S. investors among its backers. And HongShan and GGV’s new unit, GGV Asia, could still invest in U.S. start-ups, the report said.