Skip to main content

Inter­na­tional fund­ing for Chinese start-ups dried up.

Inter­na­tional fund­ing for Chinese start-ups dried up last year, push­ing many fledgling tech­no­logy com­pan­ies to raise cap­ital and list at home instead of on Wall Street.

China

Dol­lar invest­ments in the coun­try’s new com­pan­ies fell by almost three-quar­ters last year, declin­ing to 19 per cent of the total cap­ital put into start-ups from 39 per cent in 2021, accord­ing to new data from research group ITJuzi.

Chinese investors and founders say geo­pol­it­ical ten­sions with the US, as well as Beijing’s tech crack­down and harsh zero-Covid policy, spooked for­eign investors. «China’s ven­ture mar­ket was very, very dif­fer­ent last year,» said Zhou Xiang, head of Mingde Cap­ital Advisors, which helps start-ups raise fund­ing. «In the past, half of all deals were dol­lar based. Now it’s 70-80 per cent ren­minbi,» he said.

Zhou said that the dimin­ish­ing interest in dol­lars, espe­cially in the coun­try’s tech sec­tor, was in part because founders were nervous about poten­tially being sub­ject to US sanc­tions in the future. As a result, China funds raised only $14bn last year, down from $95bn in 2021, accord­ing to Pre­qin data.

The latest investors to rethink their China strategy are Singa­pore’s sov­er­eign wealth fund GIC and the Ontario Teach­ers’ Pen­sion Plan, two groups which reaped the rewards from China deals in the coun­try’s boom years.

Even with Beijing abandon­ing zero-Covid and eas­ing its tech crack­down, for­eign investors might find it dif­fi­cult to return. So the White House is work­ing to cre­ate a screen­ing pro­cess for US cap­ital flow­ing into China to reduce the flow of money from US investors to Chinese com­pan­ies or sec­tors that help the People’s Lib­er­a­tion Army.

www.sba.tax

Labels:

Comments

  1. Sam20 February 2023 at 10:06

    The zero-Covid approach was a major mistake by China. It tanked their economy and things will not get back to normal without at least a few years passing. They were so focused on something that was clearly impossible that they didn't pay attention to what they had going for them and now they've lost it.

    ReplyDelete
  2. Oliver20 February 2023 at 10:30

    The US-China relationship needs to get back to some kind of normal but it will take some time. Blocking these relationships altogether is bad for everyone involved.

    ReplyDelete
  3. Grace20 February 2023 at 12:39

    China did a great job in scaring most investors. Whether they were foreign or not, most realized they needed to invest elsewhere at least for the time being. Some major players have left China for good because of current events and problems but also because they didn't want to risk losing everything if China's leaders may decide they were a threat.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

H&M struggles with profitability.

  H&M blamed high clothes prices ,  its exit from Rus­sia and a cost-cut­ting pro­gramme for an unex­pec­tedly large col­lapse in its earn­ings as the world’s second-largest fash­ion retailer’s struggles with prof­it­ab­il­ity con­tinue .  Oper­at­ing profit plunged 87 per cent to SKr820mn in the fourth quarter to the end of Novem­ber from a year earlier .  Shares in H&M fell more than 4 per cent to SKr125 . 80 yes­ter­day ,  hav­ing lost nearly half of their value since their recent peak in April 2021 .  The Swedish retailer ,  which lags behind Indi­tex ,  the Span­ish owner of Zara ,  in sales and prof­it­ab­il­ity ,  launched a SKr2bn cost-cut­ting pro­gramme last year that included 1 , 500 job losses . H&M’s sales in the fourth quarter were up 10 per cent to SKr64 . 4bn but flat in local cur­rency terms .  It said sales from Decem­ber 1 to Janu­ary 25 had increased 5 per cent in local cur­ren­cies .  «Sales in ...
2 comments
Read more

Commercial properties continue to fall

  UK commercial property values and rents are projected to «tumble off a cliff edge» in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall. A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the industry in the first three months of the year, with offices falling 3.1 per cent. «Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,» he said. Listed vehicles have already seen this valuation drop in their share prices, with real estates investment trusts such as Land Securities and British Land falling by a fifth or more this year. According to the RIB estate report, offices are expected to suffer the most significant sales price falls, with nearly a third of respondents expecting them to come down by more than 5 per cent. In addition, the survey projected a 1.3 per cent fall in rents per square foot over the perio...
Post a Comment
Read more

BoE is considering to increase deposit guarantee.

  According to anonymous sources, the Bank of England is considering reforming its deposit guarantee scheme. The move comes in response to concerns that the current system may not be sufficient to protect customers in case of a bank failure. The Financial Services Compensation Scheme guarantees deposits up to £85,000 per person per institution. However, some experts have raised concerns that this may not be enough to prevent a run on banks in a significant financial crisis. As a result, the Bank of England is reportedly considering several options for reforming the scheme, including increasing protection and introducing more stringent bank regulations. A final decision on any changes will be made later this year. One option the Bank of England considers is increasing the protection offered by the deposit guarantee scheme. This could involve raising the maximum amount guaranteed per person or extending coverage to more types of deposits. Another possibility is to introduce more stri...
Post a Comment
Read more