There’s been uncertainty in the air owing to the economical and political differences and the ongoing trade war between the two largest economies of the world. Despite a thaw in the relationships and a flurry of sanctions and counter-sanctions between the two economic giants, investments across the board seem to be unaffected. The venture capitalists based in the US seem to have a liking for Chinese tech firms, while the Chinese investors seem determined to reciprocate that love towards the US’ startup industry.

The investment by the Chinese investors in the US startup scene stays strong despite all the turns and twists in the US Administration’s policies towards Chinese businesses and towards trade and business with China in general.

In a bold move, the US introduced tariffs on $250 billion worth of Chinese made goods, which triggered a trade war ever since. The US did not stop there; it also went on to blacklist and penalize two of China’s largest companies and telecom giants, ZTE and Huawei, and stopped them from conducting business within the USA.

However, a recent report revealed that Chinese investments have been resilient in the face of most of these developments in recent times.

A new bill passed by the Trump administration to limit Chinese investments into cutting edge technology did curb the investments somewhat in those sectors, but the overall flow remained unaffected. The total dollar value of the investments has largely remained stable after it peaked to $3.3 billion by the end of 2018. According to a research report by the Rhodium Group, China has, in fact, amped up its investment activity ever since as it challenges the recent laws passed by the US government.

Ever since the turn of the century, Chinese firms have invested over $14 billion in the US startup scene. 80% of these investments have come in the last 5 years.

In an attempt to deter Chinese investments into cutting edge technology within the USA, it has given expansive powers to an obscure government body known as the Committee on Foreign Investment in the United States (CFIUS). A new law has also been introduced in this regard.

The expanded powers will allow this branch of the government to keep Chinese investors from acquiring controlling stakes within US-based tech businesses. As a result, most venture capitalists based out of China have avoided investing in the closely monitored tech industries such as those involving cybersecurity, artificial intelligence, or data analytics. Almost 40 of the Chinese venture capital firms went to the pharmaceutical and biotechnology firms last year.

Despite all of these deterring developments, Chinese investments have been largely resilient.