WASHINGTON — The Coalition for a Prosperous America (CPA) today released a statement after Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House China Committee unveiled the findings of their bipartisan investigation into five U.S. venture capital firms. The lawmakers found that these firms invested at least $3 billion in, and provided expertise and other benefits to, People’s Republic of China (PRC) critical technology companies, including many aiding the Chinese military, surveillance state, or the Chinese Communist Party’s (CCP) genocide in Xinjiang.
Chairman Gallagher and Ranking Member Krishnamoorthi’s bipartisan investigation is an alarming documentation of how American venture capital firms are investing billions into malign CCP companies. Once again, Congress is presented with yet more proof of how U.S. capital is being exploited by the CCP to fund their military modernization, Orwellian surveillance state, human rights abuses, and genocide. Despite the mounting evidence, retiring House Financial Services Committee Chairman Patrick McHenry is still opposed to putting an end to this national security threat. It is clear that Speaker Johnson must override McHenry’s failure and unwillingness to act and bring legislation to the House floor immediately.
The five firms used as case studies in the investigation are GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China, and Walden International. The Committee’s investigation uncovered that these firms funneled over $1.9 billion to AI companies that support China’s human rights abuses or military, and at least another $1.2 billion into the PRC’s semiconductor sector — including semiconductor companies that advance the CCP’s military, genocidal, and techno-totalitarian ambitions. The report also highlights other investments that may raise significant security or human rights concerns.
In certain cases, the lawmakers even uncovered internal VC memorandums stating that Chinese investments were more attractive if the company supported the Chinese government’s surveillance state or its strategy for technological supremacy, designed to weaken the United States. The lawmakers also lay out how, beyond dollars, these investments provide credibility and know-how to problematic PRC companies.
In light of the bipartisan investigation’s alarming findings, Chairman Gallagher and Ranking Member Krishnamoorthi recommend the United States immediately:
- Restrict U.S. investment in entities sanctioned or red-flagged by the U.S. Government for ties to the PLA, or forced labor and genocide.
- Implement additional sectoral outbound investment restrictions in areas related to the PRC’s critical and emerging technologies, military capabilities, and human rights abuses, building upon those recently established through executive action for PRC AI, semiconductor, and quantum computing companies.
Read the fuller report: “The CCP’s Investors- How American Venture Capital Fuels the PRC Military and Human Rights Abuses”
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