Despite Rising Risks, ​​U.S. Investors Pump Billions of Dollars Into China VC Funds

American institutional investors are pouring billions of dollars of fresh capital into some of China’s top venture capital firms despite rising geopolitical tensions between the two nations and regulatory attacks that hurt China’s biggest public tech stocks and some private companies over the past year. The investors are betting that new investments in sectors such as healthcare and robotics will face less scrutiny from the Chinese government compared to social media and e-commerce.

One of the top VC firms in Beijing, Gaorong Capital, recently raised about $1.8 billion from investors in the U.S. and elsewhere, according to two people briefed about the previously unreported fundraising. Meanwhile Shanghai-based Qiming Venture Partners, an early backer of smartphone giant Xiaomi and a major venture investor in healthcare, has raised more than $2 billion for two new funds, mostly from U.S. investors, according to one person with direct knowledge and another person who was briefed about it.