- The report claims that American venture capital firms have helped “build and strengthen” China’s authoritarian regime.
- American venture capital is funding the “production of weapons systems designed to kill Americans and enhance China’s warfighting capabilities.”
- And worst of all, American families are “unwittingly contributing” to and “fueling our own destruction.”
Top lawmakers on Thursday released an explosive report revealing how billions of US dollars are flowing into the hands of the Chinese Communist Party and being used to support its military and genocidal efforts.
The report claims that American venture capital firms have helped “build and strengthen” China’s authoritarian regime through a variety of methods.
According to the House China Select Committee, five top U.S. venture capital firms invested more than $3 billion in Chinese AI and semiconductor companies between 2001 and 2023.
The committee launched an investigation last summer into the finances of five companies: Sequoia Capital, Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital.
Chairman Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., warn in the report that their investigation “barely scratched the surface of the danger that U.S. investment in Chinese industry poses to our national security.”
And billions more, beyond what they discovered, may be flowing from Americans to PRC companies.
The report claims that American venture capital firms have helped “build and strengthen” China’s authoritarian regime through a variety of methods.
The committee last summer launched an investigation into the finances of the companies Sequoia Capital, Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital.
The funds are being used to “support military, digital authoritarianism, and the PRC’s efforts to develop technological supremacy and undermine American technological leadership.”
Findings from the six-month investigation found that those five companies also sent “more than $1.9 billion to PRC artificial intelligence companies and $1 billion to more than 150 PRC semiconductor companies.” .
Additionally, they invested “more than $130 million in Chinese artificial intelligence companies that were blacklisted by the US government for supporting the Chinese Communist Party’s genocide and human rights abuses.”
Sequoia Capital even invested more than $1 billion to help CCP-controlled Bytedance, TikTok’s parent company, as they worked to expand overseas, lawmakers say.
“Not only has Bytedance partnered with China’s Ministry of Public Security to suppress internal dissent within China, but, according to the FBI in sworn testimony, it has the ability to control software on millions of American devices through TikTok,” they said. write.
And worst of all, American families are “unknowingly contributing,” they say.
“All five companies the Select Committee investigated have US-based investors, limited partners that include institutional entities such as university endowments, family offices and pension funds.”
The lawmakers claimed that Americans whose retirement accounts are invested in these five venture capital firms “are contributing part of their hard-earned salaries to further the authoritarian ambitions of the Chinese Communist Party.”
China also now has the ability to hold key American executives and companies “hostage,” the report warns.
It also “critically weakens” the United States’ own economic sovereignty and security.
And American venture capital is funding the “production of weapons systems designed to kill Americans and enhance China’s warfighting capabilities.”
Chairman Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., warn in the report that their investigation “simply scratched the surface of the danger that U.S. investment in Chinese industry poses to our national security.”
As a result, lawmakers say the ‘status quo’ is ‘unsustainable’ and are urging the government to take several steps to immediately stop the flow of money into China.
The first recommendation is to restrict any US investment to “entities sanctioned or flagged” by the government.
Second, lawmakers say legislation should be put in place to further restrict any “outbound investment” in areas that overlap with China’s technologies, military capabilities and human rights abuses.