According to a 66-page House committee report, American venture capital firms have invested $3 billion in Chinese tech companies, which supported the Communist government and its military efforts and contributed to the persecution of Uyghur Muslims in Xinjiang.
The House Select Committee on the Chinese Communist Party, led by Chairman Mike Gallagher (R-Wis.) and Ranking Member Raja Krishnamoorthi (D-Ill.), disclosed the outcomes of its investigation into five firms that have backed Beijing’s military advancements, facilitated human rights violations, and enhanced China’s semiconductor industry. The report highlights investments from GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China, and Walden International, which surpassed $1.9 billion in Chinese A.I. enterprises and $1 billion across over 150 semiconductor companies.
American financial engagement in Chinese industries poses a serious risk to U.S. national security beyond what these figures show. In their report, Gallagher and Krishnamoorthi highlight how U.S. venture capital has fortified China’s key sectors via fund and knowledge transfer. Both representatives are urging tighter U.S. restrictions on investments in Chinese firms that have been sanctioned or identified by the federal government for their connections to the People’s Liberation Army, forced labor practices, or genocidal activities. They also advocate for additional measures building upon President Biden’s executive order from August 9, 2023, which prohibits certain outbound U.S. investments aiding China’s military, intelligence, surveillance, and cyber technology advancements.
A significant portion of these venture capital investments has flowed into ByteDance, the parent company of TikTok, which is currently under U.S. Justice Department scrutiny for alleged espionage activities against American citizens.
The report further points out that over $130 million from U.S. venture firms have been directed to Chinese A.I. companies blacklisted by the federal government for developing autonomous weapons systems, harvesting genetic data from U.S. citizens, and creating facial recognition technologies used against Uyghurs in Xinjiang.
