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Sequoia Capital’s decision this week to split off its China operations showed the impact of growing tensions between Washington and Beijing. But the political conflict has sparked a bigger and more important change: Suddenly, American capital has stopped flowing to Chinese venture capital and private equity funds en masse.
The University of Chicago, the Robert Wood Johnson Foundation and other major U.S. endowments and foundations have recently indicated to Chinese fund managers and others that they are halting investments in the country, according to people with direct knowledge of the communications. U.S. public pension funds also have largely pulled back from China, according to Chinese VC firms and people who help them raise capital.