US President Donald Trump’s threat to block Chinese investment in US companies could be trouble for a number of American automotive and technology companies using Chinese funds to develop electric and self-driving cars and related services, from Tesla Inc to dozens of Silicon Valley startups.
Chinese companies in the past five years have funded at least 80 US transportation startups, with a combined valuation of more than $100 billion, while also pouring billions into established firms such as Tesla, according to analysis of publicly available data.
Likewise, US corporations and private investors have funded at least 60 Chinese startups — 16 of them so-called unicorns, valued at $1 billion or more — often co-investing with their counterparts in China.
Many of those investments are focused specifically on two key areas of future transportation: electric vehicles and automated vehicles. These are keystones of Beijing’s “Made in China 2025” initiative, one of several government policies driving Chinese tech investments overseas. Electric and self-driving vehicles also are expected to underpin the next wave of global transportation and services in the 2020s.
For now, US lawmakers and Trump appear to be focused on the money flowing into the United States from China, while expressing concern about advanced technology flowing back to China from the United States.
Last week, John Frisbie, president of the US-China Business Council, responded to those concerns, urging both governments to “step back” from threats and instead continue discussions to improve intellectual property protections and market access for American companies in China and avoid “sanctions that would harm families and jobs in each country.”
“We need to ensure that we have the right balance between our national security and economic interests,” Frisbie said in a statement issued by his business council.
More than 20 Chinese companies — including Internet giants Tencent Holdings Ltd, Alibaba Group Holding Ltd and Baidu Inc, as well as state-owned SAIC, China’s largest automaker — have offices in California’s Silicon Valley and have funded a broad spectrum of US tech startups focused mainly on electric and self-driving vehicles.
US automotive companies, among them General Motors Co, have invested in Chinese transportation startups.
Critical backing also has been provided by US venture firms, notably Silicon Valley stalwart Sequoia Capital, which has seeded at least 20 Chinese startups in the transportation sector, often co-investing with one or more Chinese partners. — Reuters
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