Top lawmakers put out a bombshell report Thursday revealing how billions of American dollars are flowing into the hands of the Chinese Communist Party – and being used to support their military and genocidal efforts.
The report states that U.S. venture capitalist companies have helped ‘build and strengthen’ China’s authoritarian regime through a variety of methods.
According to the House China Select Committee, over $3 billion was invested into Chinese artificial intelligence and semiconductor companies by five top U.S. venture capitalist firms between 2001 and 2023.
The committee launched an investigation last summer into the finances of five companies: Sequoia Capital, Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital.
Chairman Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., warn in the report that their investigation ‘merely scratched the surface of the danger that American investment into Chinese industry poses to our national security.’
And billions more beyond what they uncovered may be flowing into PRC companies from Americans.
The report states that U.S. venture capitalist companies have helped ‘build and strengthen’ China’s authoritarian regime through a variety of methods
The committee launched an investigation last summer into the finances of companies Sequoia Capital, Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital
The funds are being used to ‘support the PRC’s military, digital authoritarianism, and efforts to develop technological supremacy and undermine American technological leadership.’
The findings over the six-month investigation discovered that those five firms also sent ‘more than $1.9 billion into PRC AI companies and $1 billion into over 150 PRC semiconductor firms.’
Additionally, they invested ‘over $130 million in Chinese AI companies that the U.S. government blacklisted for supporting the Chinese Communist Party’s genocide and human rights abuses.’
Sequoia Capital even put over $1 billion into helping CCP-controlled firm Bytedance, TikTok’s parent company, as they worked to expand overseas, say the lawmakers.
‘Not only has Bytedance partnered with the Chinese Ministry of Public Security to crack down on internal dissent within China, but according to the FBI in sworn testimony, it has the ability to control the software on millions of Americans’ devices through TikTok,’ they write.
And worst of all is that American families are ‘unwittingly contributing,’ they say.
‘All five firms that the Select Committee investigated have U.S.-based investors, —limited partners that include institutional entities like university endowments, family offices, and pension funds.’
The lawmakers stated that Americans whose retirement accounts are invested in these five venture capital firms ‘are contributing part of their hard-earned paycheck to it furthering the Chinese Communist Party’s authoritarian ambitions.’
China also now has the ability to hold major American executives and companies ‘hostage,’ the report warns.
It also ‘critically weakens’ the United State’s own economic sovereignty and security.
And U.S. venture capital is financing the ‘production of weapons systems designed to kill Americans and advance China’s warfighting capabilities.’
Chairman Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., warn in the report that their investigation ‘merely scratched the surface of the danger that American investment into Chinese industry poses to our national security’
As a result, the lawmakers say that the ‘status quo’ is ‘untenable’ and are urging the government to take several steps to immediately stop the flow of money into China’s hands.
The first recommendation is by restricting any U.S. investments into ‘entities sanctioned or red-flagged’ by the government.
Second, the lawmakers say legislation should be implemented to further restrict any ‘outbound investment’ into areas that overlap with China’s technologies, military capabilities, and human rights abuses.