To Win the Tech Race with China, Unleash the Venture Capitalists

President Joe Biden's recent visit to India and Vietnam marked one of the administration's recent signals for economic and technological "de-risking" with China. The trip followed Biden's executive order, issued in August, that vowed to block U.S. venture capital and private equity investment in Chinese firms working on sensitive technologies such as semiconductors, artificial intelligence, and quantum computing. An era of global venture capital appears to be coming to a close. As Washington attempts to limit cross-border capital flows, however, America might be at risk of forfeiting its own access to Chinese technology and long-standing commitment to global investment. While the executive order is intended to be narrow and targeted at military acquisitions of key technology, it epitomizes a broader trend of increasing scrutiny on high-tech venture investment relationships between the U.S. and China. In a high-profile rebranding, Sequoia Capital recently spun off its highly successful China arm in June.