Beijing’s unslakeable thirst for the latest technology has spurred a proliferation of “accelerators” in Silicon Valley that aim to identify promising startups and bring them to China.
The surge in the number of China-focused accelerators – which support, mentor and invest in early-stage startups – is part of a larger wave of Chinese investment in Silicon Valley. At least 11 such programs have been created in the San Francisco Bay Area since 2013, according to the tech-sector data firm Crunchbase.
Some work directly with Chinese governments, which provide funding. Reuters interviews with the incubators showed that many were focused on bringing U.S. startups to China.
For U.S. government officials wary of China’s growing high-tech clout, the accelerator boom reaffirms fears that U.S. technological know-how is being transferred to China through investments, joint ventures or licensing agreements.
“Our intellectual property is the future of our economy and our security,” Senator Mark Warner, the Democratic vice-chairman of the U.S. Senate Intelligence Committee, said in a statement to Reuters about Chinese accelerators. “China’s government has clearly prioritized acquiring as much of that intellectual property as possible. Their ongoing efforts, legal or illegal, pose a risk that we have to look at very seriously.”
The U.S. has already moved to block many Chinese acquisitions in the tech sector, and is considering several measures that could impose sweeping new strictures on Chinese investment in Silicon Valley.
U.S. President Donald Trump’s crackdown down on visas for foreign tech workers and threats of a trade war with China are also changing the landscape.
And to be sure, the Chinese programs are a small part of the picture; there are 159 accelerators and 70 incubators of all types in the San Francisco Bay area, according to Crunchbase.
Yet the accelerators reflect close ties between entrepreneurs, tech investors and top engineering talent in the U.S. and China.
U.S. universities remain a major training ground for Chinese engineers, for example, and U.S. companies such as Microsoft have long had research laboratories in China.
Officials at several China-backed accelerators told Reuters their goal was to help startups gain access to the China market and nurture relationships between entrepreneurs and investors in both countries.
“We are building the door or bridge to the China market,” said Wei Luo, chief operating officer at ZGC Capital Corp, which runs the ZGC Innovation Center.
The center is backed by Zhongguancun Development Group, an entity funded by the Beijing local government; its name refers to the Zhongguancun neighborhood, which is sometimes called China’s Silicon Valley.
Accelerators like ZGC “help U.S. entrepreneurs understand China better,” Luo said.