Beijing’s Tech Crackdown Doesn’t Slow Early-Stage Chinese VCs

Beijing’s regulatory crackdown and a $1 trillion selloff of Chinese tech stocks haven’t stopped venture capitalists from making new investments in early-stage Chinese startups.

Chinese VC investors are keeping one eye on the government’s new policies, which have caused Chinese startups to suspend their plans for U.S. initial public offerings, throwing into doubt what has long been a key path for venture capitalists to make a return on their bets. But they remain bullish and in recent weeks invested more money in sectors they say are promising and also more insulated from such crackdowns. Those areas include biotechnology, robotics and software for manufacturing and logistics, as well as export-focused e-commerce. The continued bets underscore their faith that global stock investors will welcome back Chinese companies once the regulatory pummeling eases.