Global venture capital (VC) seems to be hedging its bets on Chinese tech startups as a sweeping regulatory crackdown continues. On Aug. 10, Alibaba-backer SoftBank said it would pause investing in China until “the situation is clearer.” SoftBank funds are also major investors in Beike, Bytedance, Didi Chuxing, and Zuoyebang, among other Chinese startups.

But the latest data shows 2021 so far hasn’t been a bad year for VC investment in China. Are US dollar funds really pivoting away from the massive market?

Bottom line: There are signs that foreign VCs are adjusting their investments in China because of recent regulatory changes. But venture capitalists we talked to on the ground said they are optimistic, arguing that stricter regulations can be an “opportunity,” even as they expressed worry. 

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Wei Sheng

Wei Sheng is TechNode's feature editor. You can contact him at shengwei [at] technode [dot] com.