Chinese Cash Is Suddenly Toxic in Silicon Valley, Following U.S. Pressure

https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-in-silicon-valley-following-u-s-pressure-campaign-11560263302

by antiviral • 7 years ago

303 266 7 years ago

wsj.com

lallysingh• 7 years ago

Unlaundered Chinese cash, of course. Hop it through an "investment" somewhere else and suddenly it's the investment arm of a multinational REIT.

aswanson• 7 years ago

Dampens direct influence proportionally, though. The "cleaner" the money is, the more difficult it is for nefarious sources to dictate terms of use to the end user.

Leary• 7 years ago

What is the legal basis, if any, for getting rid of your investors for this or other reasons?

mediaman• 7 years ago

There isn't. In order to get rid of an existing Chinese investor, you have to work out a deal. If the investor really likes their investment, the terms will have to be fairly attractive to the investor to exit.

C1sc0cat• 7 years ago

I would expect that there are national security laws that could be used if not explicit nationalisation.

umeshunni3• 7 years ago

There's no legal basis. It's just Xenophobia.

wavefunction• 7 years ago

It could be xenophobia. It could be money laundering regs. It could be "national security concerns" which may be xenophobia or may be legitimate.

aclsid2• 7 years ago

Nah, nobody is complaining about Taiwanese or Japanese investment, so that is moot point, mostly made by Chinese from the continent when things don't go their way.

peteretep• 7 years ago

Sinophoia, rather than xenophobia

inflatableDodo3• 7 years ago

Many people critique the system of global capitalism, however 'can we please return to feudalism', is not generally what most of them were meaning.

surge• 7 years ago

Chinese investment means increased pressure on tech oligopolies* to increase censorship of media critical of China. They've been branching out to increase soft influence, keep news sites and Olympic committee from recognizing Taiwan as a separate nation. Then there's what is currently going on in Hong Kong. Chinese investor cash is effectively Chinese government investment. It's not a good thing.

*edit

1-62• 7 years ago

How much of it is hype though? Tencent invested $150 million into Reddit but all I read on FP are Hong Kong demonstrations and Tank Man.

r00fus• 7 years ago

The idea is that successful message control will be subtle to imperceptible at first, but through successive actions it will just become commonplace to "not diss China".

If Reddit is the "forum of the internet" then it won't matter if it slowly erodes into a Fox News like media presence. It will exert the gravity over other forums through its "reasonability" on non-sensitive topics.

Kind of like how most modern politicians don't say anything bad about Israel.

goldcd• 7 years ago

To be fair we've all been using foreign aid, armament sales and all the rest for exactly the same reasons.

gowld2• 7 years ago

"We" is the US Government.

And people governed by the recipients of that aid are rightly suspicious of the strings attached.

Analemma_• 7 years ago

That includes Hacker News, by the way. Now that "YCombinator China" is a thing, sooner or later YC is going to start getting gentle insinuations that they really ought to tone down the criticism of China on that forum site they run, if they want to keep doing business there. Then the insinuations will get not-so-gentle, and at that point either YC China or Hacker News will get the bullet.

leroy_masochist7• 7 years ago

Meh...PG writing a blog post entitled "Why YC Is Quitting China" would cause plenty of tsoris in Beijing, and the Chinese certainly know this.

I'd bet that PG/sama have thought about this set of issues, and they probably have their redlines drawn, but are probably also not advertising them, as is strategically prudent.

bjourne3• 7 years ago

Paul Graham (owner of Hacker News) has stood up to bullies before https://www.foxbusiness.com/features/israeli-vc-un-invites-y... If he didn't cave in to Israeli pressure he won't cave in to Chinese either.

dcolkitt• 7 years ago

Not that this isn't a valid concern, but is there really any evidence that this is happening in Silicon Valley? Hong Kong's a different matter because of just how comparatively dominating and close by the mainland Chinese market is compared to the tiny city state.

But in the US tech sector, the Chinese market is at best an after-thought. We're also living through probably the strongest seller's market in history when it comes to venture funding. My guess is that in most situations if a fund like Tencent tried to force an Internet startup to censor their content, they'd get laughed in the face as the founders just walked next door to the next VC firm on Sand Hill Road.

(Disclaimer: I'm not a SV insider by any stretch. So take these speculations on my part with a big grain of salt...)

ben_jones2• 7 years ago

As someone who just spends a lot of time in engineering slack channels, comments seem to alternate every other day on how hard or how easy it is to raise money. I've been through fund raising once (~5 years ago) as a small-time founder and can't help but believe the reality is somewhere in between gold-rush and desert.

fragmede• 7 years ago

(I don't have access to the actual article due to WSJ paywall.)

Tencent tried to force an Internet startup to censor their content

I assume you are referring to Tencent's recent investment in popular social media site Reddit, during their $300mm series D, at a $3B valuation, so they've already taken the money, whether they will laugh across across sand hill road is another question.

There is not yet direct evidence, of such censorship having yet occurred, but once it does happen, could any outsiders prove censorship beyond a shadow of a doubt? Give it time, first, for corporate censorship to become normalized on the English areas of the site, before pro-Hong Kong viewpoints become demonized, and Chinese mainland views propagate. Like, honestly, weird memes of shirtless Putin on horseback.

This is coming around especially as censorship in the US is also slowly becoming normalized. Try saying the phrase global climate change/warming as a government scientist. And then watch the people that try to justify it.

cwkoss4• 7 years ago

A reddit user from Hong Kong was recently banned from the /r/pics/ subreddit for posting about their support for the Hong Kong protests against

https://www.reddit.com/r/chinareddits/comments/bz177v/got_ba...

Tencent recently invested in Reddit.

https://www.abc.net.au/news/2019-02-11/reddit-users-revolt-o...

gowld2• 7 years ago

https://www.pcgamer.com/tencent-imposes-new-regulations-on-s...

"Tencent imposes new regulations on streamers in China"

Yes, these regulations are currently China-specific, but (1) that's bad enough itself, (2) Companies may apply censorship worldwide as a an engineering-simplification measure.

they'd get laughed in the face as the founders just walked next door to the next VC firm on Sand Hill Road.

Money talks, and Tencent and other Chinese companies have a lot. Once they've bought their stake, they can't be simply laughed off.

sonnyblarney2• 7 years ago

" they'd get laughed in the face as the founders just walked next door to the next VC firm on Sand Hill Road."

I don't think it's so easy, because the issue wouldn't come up during funding, it'd happen later.

Also - the vast majoriy of companies do not 'waltz into VC to raise money'. Consider that if they are taking Chinese money, it might be a sign they had difficulty with American firms, because why would you take money from a super foreign investor if some entity in the Valley would fund you? 'Better terms'? Well, those terms might have 'strings attached'.

But I think it's right to point out the possibility that this mightn't be rampant.

Maybe it's more common, possibly on a case to case basis, but I don't think startups are acting in the 'strategic interest of Donald Trumps trade war' plan, so to speak.

KorematsuFred2• 7 years ago

Is this very different from Americans though ? Americans have forced all nations to treat Iran as a terrorist state when it is very friendly to rest of the world compared to Saudi. Saudi Barbaria exists only because of Americans.

Can we say with certainty that American money isn't coming to other countries with strings attached ?

megous• 7 years ago

Friendly? With all the bomb and assassination plots? Not friendly to Europe.

https://twitter.com/benrileysmith/status/1137831840188948485

umvi• 7 years ago

Both Iran and Saudi Arabia are dystopian oppressive tyrannies. I don't think any western nations should be "friendly" to such countries that so openly and proudly trample on basic human rights.

noelsusman2• 7 years ago

I'm not sure friendly is a word I would use to describe Iran, and Saudi Arabia would exist with or without American support. The US-Saudi alliance is rocky at best, and only exists because the Saudis have oil, and largely persists because Saudi hates Iran, which is important to the US because of their strong alliance to Israel. You have to choose sides in the Middle East, and the US chose Israel. Everything else flows from there.

The US is an enabler of Saudi nonsense, but the Saudi state is not being propped up with American resources. They would be powerful in the region regardless of American support.

briandear• 7 years ago

Iran funds Hezbollah, thus unless we want to claim Hezbollah is not a terrorist group, then it follows that Iran is a terrorist state, even if through a Hezbollah proxy.

mbesto• 7 years ago

Chinese investor cash is effectively Chinese government investment.

Agreed. I've said this before and say it again - if a Chinese acquirer is willing to buy your company for a much higher multiplier than their Western counterparts then there is an obvious reason.

bouncycastle2• 7 years ago

keep news sites and Olympic committee from recognizing Taiwan as a separate nation

No, they don't want to be a separate nation. It's a more complex situation than that. Taiwan considers itself as the Republic of China, where they consider the government in Beijing to be illegitimate, and reject communist rule.

Note that the rest of the world has also moved on, when we say "China" we also mean the one ruled by the government in Beijing, which makes the whole situation more complex.

ardy42• 7 years ago

> keep news sites and Olympic committee from recognizing Taiwan as a separate nation
No, they don't want to be a separate nation. It's a more complex situation than that. Taiwan considers itself as the Republic of China, where they consider the government in Beijing to be illegitimate, and reject communist rule.

Tell that to the currently-ruling Democratic Progressive Party (https://en.wikipedia.org/wiki/Democratic_Progressive_Party#P...):

The current official position of the party is that the "Republic of China (Taiwan)" is an independent and sovereign country whose territory consists of Taiwan and its surrounding smaller islands and whose sovereignty derives only from the ROC citizens living in Taiwan (similar philosophy of self-determination), based on the "Resolution on Taiwan's Future" in 1999. It considers Taiwan independence to be a current fact, making a formal declaration of independence unnecessary.

It is a more complex situation, but your view is dated. Taiwan has to maintain the fiction that it still supports a one-China policy, because to do otherwise and declare independence would invite Beijing's wrath: https://en.wikipedia.org/wiki/Political_status_of_Taiwan#PRC...

Bombthecat• 7 years ago

Everyone knew that and we saw it already several times in action....

qbaqbaqba• 7 years ago

American corporations don't need a special encouragement to increase censorship whatsoever. Google has been censoring searches in China for ages.

thefringthing• 7 years ago

Even Taiwan does not recognize Taiwan as a separate nation. Its position is that the Republic of China still exists, is the only legitimate state in all of China, and that its seat of government in Taiwan.

There is a growing movement in Taiwan to give up on this claim and instead pursue an existence as a de jure, rather than merely de facto independent nation.

ulfw2• 7 years ago

Do all of you have WSJ and NYTimes subscriptions? I can't read any of those links submitted quite frequently

rhino369• 7 years ago

I get them through my employer.

ishikawa• 7 years ago

When is WSJ I don't even click anymore.

solidsnack90002• 7 years ago

Subscribing to a few major newspapers is probably not a bad idea. Otherwise we’ll only see the news/ads FANG sees fit to show us.

Christian Science Monitor is apparently an overperformer (very modest brand awareness and hence very affordable, but generally respected for its journalism).

roel_v• 7 years ago

Click the 'web' link.

snarfy• 7 years ago

that hasn't worked in a long itme

thg• 7 years ago

For WSJ submissions you can append ?mod=rsswn to the url and read the article that way.

https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-...

gunshai• 7 years ago

Created an account just to thank you for this tip.

1-62• 7 years ago

The real unsung hero!

ulfw2• 7 years ago

Oh that's cool. Thanks mate!

wil421• 7 years ago

Any chance WSJ or NYT devs read HN/Reddit and work on closing these loops? They only seem to last for so long. Thanks for this one.

sophiedeziel• 7 years ago

Append "?mod=rsswn" to the url. Paywall gone!

graeme• 7 years ago

You can open them in apple News+ now. And a lot of people have it through work.

The discussions are often fruitful even if not everyone can read it.

(For News+ - open the article, click the sharesheet, select Open in News)

antiviral2• 7 years ago

Here is a snippet of the article, which I am posting under the Fair Use Act (I think you should all consider a subscription):

"Silicon Valley startup Pilot AI Labs Inc. signed a Chinese-backed venture-capital firm as its first big investor. By last summer, Pilot AI wanted it gone.

The U.S. startup hoped to sell more of its artificial-intelligence software to the U.S. government after working with the Pentagon, according to people familiar with its operations, and worried its effort could be hurt by the investor’s ties to China’s government. The chairman of the Chinese-backed investor, Digital Horizon Capital, was asked to sell back its stake, said one of the people. He angrily refused.

Chinese investors were once embraced in Silicon Valley both for their pocketbooks and their access to one of the world’s largest and trickiest markets. Today, they are suddenly less welcome.

Since late last year, amid rising U.S-China tensions, venture firms with China ties have been dialing back their U.S. investments, structuring deals in novel ways to avoid regulators or shutting their U.S. offices. Some American venture firms are dumping their Chinese limited partners or walling them off with special structures. And some U.S. startups that have taken significant Chinese money are keeping the investments quiet or trying to push their Chinese investors out to avoid scrutiny..."

PakG1• 7 years ago

That's a horrible example. Of course that's not going to wash. Of course an investor would not be willing to sell back their stake before seeing the return they were looking for. If they wanted to sell AI software to the US GOVERNMENT, they should have found US investors. If they couldn't, then investors from US allied nations. They should have seen this coming a mile away, no?

jeremyjh• 7 years ago

Our relationship with China looked a lot different in July, 2016 when they took that investment.

unnamedprophet2• 7 years ago

Agree, you take someone's money you have to give up something in return. It's a quid pro quo. To think that only means a hollow stake in the company without strength to influence the company's direction, culture, ethos, or mission is naive. Let the free market speak - if you want to eliminate Chinese or anyone else's investment, buy back their stake at whatever price they demand.

gnicholas• 7 years ago

FYI, there is no Fair Use Act (other than a failed attempt to amend the copyright law: https://en.wikipedia.org/wiki/FAIR_USE_Act).

The principle of fair use is just part of copyright law, and there's no need to explicitly invoke it when availing yourself of it.

rawrmaan3• 7 years ago

Good. We raised Series A from Chinese investors a few years ago and they were toxic. Not to mention the political implications of enriching countries like China and Saudi Arabia. In hindsight would have rather closed up shop than taken their money.

cheez• 7 years ago

Toxic how?

omginternets2• 7 years ago

Could you elaborate? What made it toxic?

internet_user• 7 years ago

Yes, please elaborate. +1

bduerst• 7 years ago

Not GP, but I've pitched to a crossover fund from China and they were super seedy. On top of having a questionable website and other investments, one of the red flags was they wanted their engineers to review our source code before/without signing any NDAs or commitments.

rawrmaan3• 7 years ago

Their personalities and expectations were toxic. They didn't understand what they invested in and were pissed when we couldn't grow a high-touch business like a pure software business. No pleasant or helpful interactions, just rage.

gist• 7 years ago

In hindsight would have rather closed up shop than taken their money.

Very idealistic and not the way I think at all. What are you going to do? Stop using any product associated with China? Where do you draw the line exactly? And who is to say that all chinese investors are the same anyway? Are you going to vet future investors (from any place) fully to make sure they are clean in every way and their intentions are pure? Or are you simply going to decide after the fact that you did enough when it actually makes no difference at all and you can say 'wow I wish I never did that'.

sniperjzp• 7 years ago

Reminds me of Reddit, Uber, Tesla and Snapchat (well, LA based), they have large portions of Chinese investment.

chewbacha• 7 years ago

In conjunction with the trade wars and increasingly hostile posturing between leaders, I'm nervous that the ultimate consequence may be war between super powers.

If raising the number of trading partners decreases the likelihood of war, decreasing may increase it's chance instead.

https://phys.org/news/2015-12-partners-wars-nations.html

elefanten6• 7 years ago

There's been no change in number of trading partners as a result of the trade war.

Also worth noting that the claim is more trading partners lowers likelihood of war. War can still happen.

At some point, economic interdependence cannot save a situation where two sides desperately want to change/preserve the state of something (about the world) and those desires come into conflict.

IMO, with US-China, the best inoculation against war would be to push for multilateral engagement... in either direction. But speaking from the US side, US needs to bring other countries into the efforts to reform the aspects of the CCP's behavior that are unacceptable long term.

Rapzid• 7 years ago

The EU is acting after what has come to light in New Zealand, Australia, and Africa. Unfortunately it appears they are acting separately because we are such great friends these days /s .

A lot of people only familiar with the surface link this to the trade war and Huawei, but those are largely reactions to the scope and reach of China's propaganda, control, and soft-power efforts that have been coming to light over the past few years.

Ultimately I believe these are all symptoms caused by a fundamental incompatibility between China's "communist", fascist government and the liberal democracies of the world. Unless that can be reconciled, which I don't believe it really can, everything else is just managing for time.

Causality1• 7 years ago

Even if the Chinese government never interfered with a single company, I don't want Chinese corporate culture "leeching into the groundwater" as it were. They put Europe and the US to shame when it comes to not giving a damn. About safety, the environment, intellectual property, you name it.

parliament32• 7 years ago

Why would you post the paywalled version of the link?

https://www.wsj.com/articles/chinese-cash-is-suddenly-toxic-...

ffn• 7 years ago

I'm all for openness and transparency, but wouldn't an increase in US refusal to play with China just lead to more censorship and oppression by the communist Chinese government?

Consider the following:

1. The Chinese communist government derives its legitimacy to rule almost exclusively from its massive economic growth (i.e. Chinese citizens and corporations are effectively saying to themselves "I'm ok to trade some of my human rights for lots of money")

2. The Chinese communist government wishes to remain in power

So if the US decides to target Chinese economic growth - i.e. lower the amount of money that an unit of human rights could buy - this should cause the Chinese citizens and corporations to respond by exercising the human right that the Chinese government is no longer able to buy with growth. In turn, this would cause the Chinese government to use alternative methods (i.e. straight-up oppression by force) to prevent the Chinese people from becoming unruly.

This sort of pressure on the Chinese government may lead to reform (which is indeed a good thing), but it may also lead to civil / politic unrest and a massive economic slow-down that will have aftershocks around the world (which is certainly less than ideal) - and all of this pretty much will depend on how Xi decides to handle this pressure.

Here in the US, We should at least recognize that this is a risky move and take measures to protect ourselves against this (somehow)

nine_k• 7 years ago

I would like to remind that the Soviet regime was defeated by economic issues.

I think the only reason the CPC regime might change is due to economic problems. The more abrupt they would be, the better: people need to remember better times and demand change to get back there — including people at higher positions in CPC itself.

Remember how the "cultural revolution" fiasco led to serious liberalization and eventually to the "economic miracle".

fmajid5• 7 years ago

Chinese growth was slowing anyway. Now they have a convenient scapegoat for that, big bad America. The long-term consequences of deep hostility against America in the general Chinese population are hard to predict, but they are not going to be favorable to us.

inflatableDodo3• 7 years ago

I would like to remind that the Soviet regime was defeated by economic issues.

It was brought to its knees by economic issues. It was defeated by helping install a puppet imbecile. And looking at current affairs, I suspect they may have held a grudge.

peterwwillis• 7 years ago

This is the turning point where tech has become a munition again. Rather than export controls, it's business blacklists.

It's a weird switch. Before we would sell billions in arms around the world with little risk of it being used against us. But digital munitions can be used against anyone, anywhere, any time. The USG will have to tightly control all tech used in the country to prevent cyber weaponry being used against us.

devy• 7 years ago

For those who claimed Chinese cash is toxic, let me ask you an important question: what about Softbank's cash that primarily coming from Saudi? What about the Ivy League schools' endowment money donated by "morally unethical"(including but not limited to middle east) sources? Are you not going to send your children to Ivy League schools?

robbrit• 7 years ago

Japan (where Softbank is from) and Saudi Arabia are not geopolitical rivals to the USA. China is. This isn't about morality.

techer• 7 years ago

National security Vs not

leroy_masochist7• 7 years ago

I think the assertion that Chinese cash is toxic is not so much because of bad things that Chinese do to their own citizens; it looks like the point you're trying to make is that Saudis : Khashoggi and gay people :: China : Uyghurs and Tiananmen, or something of that nature.

Rather, the claim of toxicity stems from the perceived tendency for Chinese investors to be difficult LPs and steal intellectual property both pre-deal during diligence and post-deal once they are in the capital structure. There's an additional perception of 'toxicity' in terms of the way that having Chinese investors might limit a company's ability to procure US Gov contracts, which is getting tighter under this administration, as described in the article.

The comparison to sending your kid to an Ivy League school makes no sense to me whatsoever, seems like a total non-sequitur.

elefanten6• 7 years ago

No reason for this to be downvoted.

IP theft/strongarming and sales opportunities are the more likely concerns from the entrepreneur/business side.

Some people are taking the moral stance, but TFA lines up with parent comment well

gnome_chomsky• 7 years ago

You're posting Whataboutisms. It's not all or nothing.

nostrademons3• 7 years ago

"Toxic" in this case isn't referring to morally questionable - it's referring to "nobody wants it". There are many sources of cash (most of them, probably) that some people would consider morally questionable. People still want most of them. The article is referring to a phenomena that's a level up from that, where the cash brings with it enough practical problems that it's not worth taking.

layoutIfNeeded• 7 years ago

I always laugh whenever I remember how Zuckerberg was pandering to the Chinese, like insisting to poorly speak Mandarin on some QA panel with Chinese students and such.

The times they are a-changin!

darkpuma2• 7 years ago

" like insisting to poorly speak Mandarin on some QA panel with Chinese students and such."

That's peanuts; check out this: https://www.telegraph.co.uk/news/worldnews/asia/china/119106...

The awkward moment reportedly arose when the Facebook founder, speaking in Mandarin, asked Mr Xi if could would honour him by giving his unborn baby daughter an honorary Chinese name. According to sources, Mr Xi politely declined, saying it was “too much responsibility”, reported Page Six, a celebrity news site for the New York Post.

DeonPenny4• 7 years ago

yeh a lot of people did this and none it worked. Now china has no allies in business

tibaiiplus3• 7 years ago

Writer of the article here. Totally get the frustrations with paywalls. Bottom line is feature stories like this take weeks, months, sometimes a year or more to produce. Sites without paywalls have to go for clicks (which are worth close to zero now that Google/Facebook gobble up most online ad budgets). If low value clicks are all you have, you end up like dailymail.co.uk.

If you want high value news, you have to pay someone a reasonable salary to report/write it.

Anyway, hope you enjoy and here's another fun part of the story:

The FBI office has conducted hundreds of briefings for companies on cybersecurity threats and economic espionage. It discourages people from using their regular smartphones and laptops when traveling in China and warns male U.S. executives to avoid “honeypot” espionage attempts by attractive women. “If you’re not a 10 in the U.S., you’re not a 10 in China,” officials say they’ve told the executives.

elefanten6• 7 years ago

Ha, good line.

Thanks for hopping in to engage here, where paywalls are met with hostility. I appreciate both sides of this argument.

But thanks especially for the reporting!

tibaiiplus3• 7 years ago

My pleasure. And btw: the best way to support the news is to share really good tips! Always on Signal for that as you can see from my Twitter handle: @rolfewinkler. ;)

antiviral2• 7 years ago

tibaiiplus , Thanks for an excellent article.

Are you planning any follow-ups on this topic? If so, would you like to be contacted with possible leads?

tibaiiplus3• 7 years ago

Always looking for leads. You can hit me up on Signal 847-380-0751

stcredzero3• 7 years ago

“If you’re not a 10 in the U.S., you’re not a 10 in China,” officials say they’ve told the executives.

Not true. If you're a 5 in the US, you're not a 10 in China. However, being Asian might well cost you a point or two in the US, depending on whom you ask. There are some weird cultural things going on in the US, in particular, manifesting as biases. I was raised in a place where we literally had to drive almost 50 miles to visit other Asian friends of the family. I have some perspective on this matter. Up until around 2011, it was not hard to find online assertions that Asian men were fundamentally less masculine and desirable, and it's still not impossible today.

Decades ago, I'd been called a "hottie." Strangely, the reactions I've gotten from women have varied tremendously -- more than makes sense to me. My conclusion after all these years, is that it had more to do with them than with myself.

My wife is from Fujian province in China. She has 4 degrees, including a PhD from Stanford. She used to perform Salsa dance. There's a video of her dancing in a gold sequined outfit looking like a starlet from the 60's. (Not public and which I'm not going to post, thank you.) She used to date millionaires, before I somehow snagged her. I've talked to her about these issues of bias, and my conclusion from those talks, is that, yes, there's some weird, pervasive "filter" in US culture, with regards to Asian men.

(I think it's in the same category of phenomena as the "Shiksa" attraction.)

yourbandsucks3• 7 years ago

There's also the thing where seemingly 90% of ads for luxury brands feature white people. If you're outside of SH/BJ, white, and over 5'10, you're a pretty interesting novelty. Definitely +2/10 at least.

hiram1124• 7 years ago

I agree as a white guy. Asian guys have never been particularly well placed in most US media, movies, etc. and there is a stigma when white women date them - you rarely ever see it outside of places like SF and NYC.

I know for a fact my white female friends (at least in high school and college) had large biases against Asian dudes.

What's worse, it seems that many American-Asian women go for white guys instead of Asian men, though I have no idea why.

On the flip side, I believe I do get an extra few points with the ladies when I travel to Asian countries. I don't know if it's because they assume I'm wealthy (which I am compared to most in low wage Asian countries) or if it is just the foreign novelty.

And it's kind of a stereotype now where the unattractive American or British gent goes over to East / SE Asia to teach English (and pick up a girlfriend or bride).

pimmen• 7 years ago

I work for a media company too that has been very aggressive when it comes to charging for our content and yes; quality journalism like this costs money and ads can unfortunately not support it anymore.

It was a good read! I appreciated your work!

bubmiw• 7 years ago

I have stayed subscribed to the WSJ since you guys broke the theranos story. The non editorial sections are the best in journalism today. NYT political bias has seeped through every article wheras WSJ clearly separates political bias between editorials and news.

germanlee• 7 years ago

WSJ didn't break the story. Other people broke the story. That story was "broken" on forums all over the internet. A WSJ journalist just collated the story and wrote a book about it. And keep in mind the WSJ journalist who broke the story refused to criticize the reporters from forbes, fortune, etc who created the theranos story. I'd have more respect for John Carreyrou if he had the professionalism and morals to go after obvious bad journalism. But he chose to stand by the journalism's equivalent of the "blue wall of silence".

Lets not forget that elizabeth holmes and the theranos nonsense was built up by journalists. Lets not forget that she was the media darling of an agenda driven "journalists" who wanted to push a narrative rather than search for the truth.

Crediting the WSJ or journalists for the theranos story is like crediting an arsonist firefighters for putting out the fire they themselves set.

Lest we forget.

https://www.vox.com/2015/10/26/11620036/theranos-ceo-elizabe...

tlear• 7 years ago

WSJ is one of the very few news outlets that are worth reading now. Keep up good work. I am glad to pay subscription

fmajid5• 7 years ago

I'd be more concerned about Chinese financing of Hollywood. Nearly every big-budget production these days has Chinese co-producers. This leads to farcical episodes like the remake of Red Dawn featuring feeble North Korea as the villain rather than China as originally envisioned.

learc83• 7 years ago

Russia was the villain in the original movie and China was on the US side (but were only briefly mentioned). Or do you mean "as originally envisioned for the remake"?

ethbro6• 7 years ago

In the original, it was in fact strongly implied that the Warsaw Pact nuked China once war broke out.

fmajid5• 7 years ago

Yes, I meant the original plans for the remake.

rhcom2• 7 years ago

I think the Red Dawn example reflects more on the power of the Chinese box office than any financing concerns. It's just too big to ignore.

inflatableDodo3• 7 years ago

I'd say that from the outside it looks much the same as it always did, just with jingoism added for China as well as the US.

NotPaidToPost• 7 years ago

If Hollywood can no longer do in-your-face American propaganda then the end is nigh, indeed.

dpau• 7 years ago

Funny you mention that, seems China is now further limiting Hollywood films within China and firing American actors:

https://www.telegraph.co.uk/news/2019/06/09/chinese-cinema-e...

etrma• 7 years ago

It's not like Hollywood is currently controlled by America. ;-)

Buldak• 7 years ago

Part of me thinks that competing propaganda might actually be salutary.

unnamedprophet2• 7 years ago

This is no different than what Hollywood already does. E.g. demonizing conservative values as antithetical to a stable government (abortion, gay and lesbian rights, income discrepancy). I recall Hillary Clinton being interviewed by Terry Gross, where she was essentially charged with bigotry in reversing positions on gay marriage. Public sentiment changes in one way as a result of social and media influences, and it's not all in the direction of truth, justice and the American way. It's whomever is pulling the puppet strings (read: funding their personal agendas).

All film and media is propagandistic in some way. Just because you swing the needle in a different direction doesn't change that fact.

fraudsyndrome• 7 years ago

All film and media is propagandistic in some way. Just because you swing the needle in a different direction doesn't change that fact.

To add to that, one of America's biggest exports is it's culture - see "Military Recruitment and Hollywood" https://youtu.be/N5xfBtD6rLY

mobilemidget• 7 years ago

You don’t have to watch those? If million+ Chinese like it though what’s the problem?

mtrovo• 7 years ago

And on the other side you have Occupied, a really good TV series where Norway stops to produce oil and the Russians starts an invasion of them with support from the EU. When I think about a country invading another for oil, there's always a name that comes to my mind, and it's not the one that appears on the series.

The reason is not that much about nationalism or soft-power. Filmmakers want to make money, and when you have a big enough consumer market filmmakers avoid controversial topics to get a chance to capture it.

kmlx• 7 years ago

china owns 5.6% of US national debt. does this make US debt toxic?

citilife• 7 years ago

The reverse is also happening and is a way bigger deal.

Resources are also being pulled out of China, as U.S. companies have spent the last several decades plowing tens (if not hundreds) of billions into China a year. It'll be a fairly large windfall coming out of China as well. To India, Mexico, Taiwan, the United States, etc.

bjourne3• 7 years ago

Why is it ok for US companies to plow billions into China, but not for Chinese companies to plow billions into the US? Seems like a double-standard.

jjeaff2• 7 years ago

Problems with the overreach and missteps of the US government aside, the US is not systematically silencing its critics through censorship and forced work camps. And the human rights record of China is abysmal in comparison to the US.

To think the two are comparable is just head in the sand at this point.

throwayEngineer• 7 years ago

I'd gladly accept their money.

My company automates things, not creates economic or political policy.

julienfr112• 7 years ago

Don't they use the dollars they receive to finance the negative US balance of trade ? Is the dollar toxic ?

Theodores2• 7 years ago

When you have a global currency that all other currencies are measured in and all oil is bought in, what happens to a country that has economic surpluses? They have to buy dollars.

What happens if countries want to buy dollars? The U.S. government (well, the Fed) has to print them. If you look at the balance of trade and look at the dollar as a printed thing, the US is very good at getting the rest of the world to buy their dollars (that can be just printed or magically made on a computer screen) and getting real stuff in return. I wish I could print money and get boxes of nice shiny iphones, shoes and other trinkets.

I think this is a pretty successful exploitation model. The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation. Apart from anything else, if another country decides to dump its dollars then if that did cause inflation in the US then that would devalue their remaining holding.

Meanwhile the US can spend as much as it wants on gunboats and the like to enforce this hegemony.

If you benefit from this system, i.e. by being an American, then the dollar is far from toxic. If you are a farmer in a developing nation trying to sell wheat then your view of the dollar may be different.

muricula• 7 years ago

"The dollars printed to go overseas to buy oil and other stuff don't come back to cause inflation." I think this part is wrong. When overseas oil companies get the dollars they are going to spend them, otherwise they wouldn't sell in the first place. If the economy worked the way you suggest I think we would see inflation from those dollars sent overseas for oil etc.

maerF0x02• 7 years ago

Anecdata time: In 2012 Canada allowed the sale of Nexen (an oil company) to CNOOC. CNOOC management promised they would keep the staff in Canada, the management local etc.

Fast forward 7 years later and it's a ghost town, they cite "business need" but somehow all the jobs have moved abroad and the only thing remaining in Alberta is a resource pump sending all the value abroad.

This comment is not intended to be about racially Chinese people, but the constantly malicious and negative behavior of the communist government in China.

majia• 7 years ago

7 years is really a long time and there is likely to be some real needs to adjust business operation. If the deal doesn’t specify a duration to keep jobs in canada, you can’t reasonably expect it to be forever.

CCP has done horrible things, but it isn’t really a CCP specific behavior; any greedy capitalist would have done the same.

fjp• 7 years ago

Yeah this is basically what every American company does after extorting some town or state for preferential tax breaks

maerF0x02• 7 years ago

you can’t reasonably expect it to be forever

Why not? The resource is still coming from Canada, they still need these employees. They're just shifting the jobs to China.

jorblumesea3• 7 years ago

So long as Chinese money comes with so many strings attached (political concessions, IP transfer) this is good for the US and US companies. Hard to imagine a country where investing comes with so much additional baggage.

entropea3• 7 years ago

Could somebody explain to me the vicious American hate for China from a totally uninformed viewpoint? Any links to read why I should also dislike China?

yourbandsucks3• 7 years ago

“It was the rise of Athens, and the fear that this instilled in Sparta, that made war inevitable.”

jorblumesea3• 7 years ago

I don't think being suspicious of a country that has its citizens in literal concentration camps is "vicious hate". It's not a bad thing to turn a critical eye towards authoritarian states and questions their money and motives. Likewise, people should be critical of the US and its role in human rights violations.

https://en.wikipedia.org/wiki/Xinjiang_re-education_camps

https://www.france24.com/en/20190510-reporters-plus-survivin...

https://www.washingtonpost.com/opinions/global-opinions/the-...

entropea3• 7 years ago

USA has 2.3 million incarcerated and prison slavery is legal under the 13th amendment, a lot incarcerated based on race and for very small crimes. A lot of those prisons also have very rough conditions and prisoners are exposed to violent and inhumane treatment. This is extremely unethical. Why is this any different? Companies send their work to these prisons for literal slave labor and I never see anyone up in arms about it. Not many seem to be critical of their own government, but love judging other governments.

https://www.prisonpolicy.org/reports/pie2018.html

lenzm• 7 years ago

From a very broad moral perspective, their human rights violations are legion[1] including large open air internment camps for ethnic/religious minorities like the Uyghur[2], political imprisonment[3], alleged organ harvesting of prisoners[4], supporting North Korea ...

From a purely tech perspective, state-sponsored hacking[5] and IP theft[6] are common.

[1] https://en.wikipedia.org/wiki/Human_rights_in_China

[2] https://en.wikipedia.org/wiki/Xinjiang_re-education_camps

[3] https://www.hrw.org/world-report/2018/country-chapters/china...

[4] https://en.wikipedia.org/wiki/Organ_harvesting_from_Falun_Go...

[5] https://www.rfa.org/english/news/china/state-hacking-1220201...

[6] https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-s...

entropea3• 7 years ago

Those are all things the USA has done in its past, and currently holds 2.3 million in prison with prison slavery legalized. Some of those are just "alleged" too.

yourbandsucks3• 7 years ago

It kinda proves OP's point that Americans would be so outraged about somebody else violating the rights of muslims..

Mr_Shiba• 7 years ago

From a very broad moral perspective, their human rights violations are legion

This judgement coming from the country with the highest incarceration rate, criminalized abortion, caged immigrants, historic systematic racism, legal bribery (lobbying), genrrymandering electoral system, countless invasions with disastrous results in the middle east, africa & asia

Don't get me wrong but outside the US everyone is wondering what is the moral high ground?

dang2• 7 years ago

Please don't do the whole list-of-links-on-flamewar-topic thing on HN. It's internet boilerplate. Anything that predictable is off topic here.

https://news.ycombinator.com/newsguidelines.html

mahkeiro• 7 years ago

Come on if human right were really an issue for the US, Saudi Arabia which oppress half of its population, which is an absolute monarchy (you know the medieval version), which has absolutely no respect of basic human rights would not be one of the best US allies.

darkpuma2• 7 years ago

Can you establish that such a "vicious hatred" even exists?

espeed• 7 years ago

IP theft, copycat tech, and forced technology transfer [1] (US corps giving their IP to gain access to the market).

[1] https://econofact.org/what-is-the-problem-of-forced-technolo...

dang2• 7 years ago

vicious American hate for China

Nationalistic flamebait is not ok on HN. Would you please stop posting that, and political flamebait in general, so we don't have to ban you again?

https://news.ycombinator.com/newsguidelines.html

umeshunni3• 7 years ago

You're being downvoted heavily (not surprising for a site with a strong US/Western audience), but here's what I think:

China is emerging geopolitical rival (balance) to the US (and the West in general).

Mainstream US media is great at amplifying US govt propaganda and publishing hit pieces on US rivals (see media portrayals of Soviet Union during the Cold war as an example: https://www.e-ir.info/2013/10/26/the-role-of-the-media-durin... ) or of Japan during the 80s (see https://spice.fsi.stanford.edu/docs/japan_in_the_us_press_bi...).

The same is happening against China now and there is an effort to shame anyone with contacts with China.

ddxv• 7 years ago

Found you comment at the bottom of the comment section. Feels like the only safe place here. I've been noticing that the past few years there has been a sharp uptick in vitriolic statements about China.

There was a great look at American 'propaganda' in one of the China in Africa podcast where they were debating whether Voice of America is American propaganda. I think their specific debate was about the term collateral debt in relation to the infrastructure projects China has undertaken in Africa and the agreements that support them. It really helped me see that while the term is still sharply defined when speaking about "other" nation's propaganda, American's have a very difficult time extracting ideas which were put out by the American government and picked up as talking points by the media.

I don't know if propaganda is still the correct term anymore, but it at least feels like group think, which worries me.

DeonPenny4• 7 years ago

P theft, copycat tech, forced technology transfer, threatening US soldier, aggression toward US allies i.e. japan, taiwan, india

ionised3• 7 years ago

Why are you and the poster above you (espeed) posting the exact same sentences under different user names?

rhacker• 7 years ago

I doubt it. During the Khashoggi thing it turned a few heads but most businesses just stayed quiet for the few months it was a thing. Now biz as usual. I would expect that the same is happening for China money. Hush hush until we get out of the cloud.

DeonPenny4• 7 years ago

The difference is that was just social pressure SA is still a US ally. China is not and given elections are coming up China will a huge talking about and looks to be approaching war on drugs level brinkmanship.

potatofarmer45• 7 years ago

It's not just Chinese investors, even having large Chinese customers raises red flags during BD work for us.

We provide a SaaS for data analytics and often we hold a copy of the client database to provide rapid answers to queries.

We were recently finalizing a deal with a US based retailer when it came out that we worked operated in China and the tone of the conversation shifted immediately. They literally sought all manners of guarantees on data security and storage that were unnecessary, but due to the current climate, seems to make everyone paranoid.

Now we have to specificlly mention in our integration docs that when we do multi-zone backups, none of those backups are in China. They never were, but now we have to be explicit because it's coming up in so many of our conversations.

Our pilot with the Chinese company ends in November. We are seriously considering terminating the deal because it's trending towards the case where we can either have China, or Non-China markets. Not both.

duxup• 7 years ago

That doesn't seem too unusual to me.

I worked with US and European financial institutions who regularly requested / needed guarantees that data (not necessary financial data, all sorts of data), who had access to what, and etc.

Most of it all seemed design to ensure that the things / company / people were within a reasonable legal context, sometimes that context was just what country the data was in, the people who worked on it.

Laws provide everyone a framework to know how things might play out if something goes wrong, if someone is in a country that generally doesn't respect those laws all rules are out the window.

singularity2001• 7 years ago

  >> Now we have to specificlly mention in our integration docs that when we do multi-zone backups, none of those backups are in China.

Similarly I've seen docs which explicitly mention that no EU data is backed up to the US

neonate• 7 years ago

http://archive.is/urxAO

ETHisso2017• 7 years ago

It's interesting: Chinese cash is welcome in real estate and the US treasury market. What is it about startups that makes the government concerned?

mark_l_watson• 7 years ago

I think I know why: in the USA we require growth in housing and the stock market to keep things together, to keep the system running.

Our government is worried about competition in tech, not investment in our equity markets. One is viewed as harmful, the other we depend on.

I am disappointed by this entire affair. I like to see each country have its own culture and uniqueness, but I would like the world economic and tech engines to function well for everyone. Even playing field.

roymurdock• 7 years ago

China buys US debt so it can peg the Yuan to the dollar to keep volatility low and manage its export levels accordingly. China only owns 5% of outstanding US national debt, so even if they sold it off in a flash sale for some reason, someone else would buy it (other nations or more likely the Federal Reserve). Selling off US debt is not a credible economic threat for China. [1]

No powerful US entities have a vested interest in keeping foreign Chinese money out of US real estate, especially if it's due to wealthy individuals investing abroad. The real estate owners win, the developers win, construction companies win, the mortgage-underwriting banks win, the losers are the young/renters/non-capital owners seeking jobs in these hotspot areas because their rent just goes up and up per square meter. This segment of the population has no political power, they can only hope to make enough to put a down payment on a house and join the vested interests as capital owners - hopefully the bubble doesn't burst taking their job and leaving their mortgage underwater. The exception here would be if a Chinese government-owned investment vehicle tried to purchase large swathes of real estate, it could potentially use this large investment as a weapon to control cost of living/tank real estate values in that area if the government wanted to.

The real reason is because US technology (networking, telecom, A&D, automotive) companies have a huge vested interest in keeping their competitive advantage over Chinese technology companies which are on the cusp of transforming from cheaper/lower quality alternatives to preferred suppliers in building out information technology infrastructure globally, including in the US. The US government also has a huge vested interest in controlling this infrastructure, especially in the US, or at least being on good terms with the companies that build and manage it. It doesn't want partially government-owned and directed companies like Huawei supplying complicated and sometimes unvettable hardware and software over which Americans send each other vital information.

[1] China's central bank uses a modified version of a traditional fixed exchange rate. That's different from the floating exchange rate the United States and many other countries use. The People's Bank of China manages the yuan's value. It keeps it fixed to a basket of currencies reflecting its trading partners. The basket is weighted toward the dollar since the United States is China's largest trading partner. It keeps the yuan's value within a 2 percent range against that currency basket.

Why does China fix the yuan's value to the dollar? It manages its currency to control the prices of its exports. It wants to make sure its exports are reasonably priced when sold in the United States. Every country would like to do this, but few have China's ability to manage it so well. China's command economy allows it to control the central bank and many businesses. As a result, the Communist Party directs China's economy. The U.S. government regulates exchange rates instead of managing them.

https://www.thebalance.com/how-does-china-influence-the-u-s-...

hiram1124• 7 years ago

As someone who has been waiting on the sidelines to buy a home for years now, I'd love to see the Chinese begin pulling cash out of our real estate market.

It's said that most of this cash has pushed up prices mostly on the West coast, but I have this belief that a lot of money has trickled into almost all metro areas of the US. I can't see any other reason for home prices to be so out of whack in medium-sized US cities with no apparent influence (e.g. Amazon HQ2 in DC).

robocat• 7 years ago

New Zealand banned foreign investors last year.

Prices have dropped where I live (although could easily be due to other causes). Mortgage rates have also dropped recently.

thorwasdfasdf• 7 years ago

home prices have more to do with housing policy than chinese investors. Places that don't restrict housing supply don't have housing problems because enough new houses get built to where the price of housing never exceeds the cost of building the house for too long.

sonnyblarney2• 7 years ago

Real estate and Treasuries don't come with any real kind of leverage in other areas.

Equity has power and influence over companies.

DeonPenny4• 7 years ago

Chinese investment is being scrutinized in real estate too. The govt has been forcing chinese companies to sell various big investments.

dmode• 7 years ago

Hey, Chinese money is bad. But Saudi money is more than welcome. 50% of Softbank's vision fund is from Middle East sovereign funds, who have even more brutal censorship laws and commits more brazen human rights policies. US policy is completely incoherent and probably explained by who pays the bribes to Whitehouse vs. any legitimate principles.

_ptgt• 7 years ago

It helps that SA isn't really a risk to export its censorship (among other ills) to the US in the near future.

I generally sympathize with the position of rejecting Saudi money where possible, but it's inaccurate to frame US policy towards China in purely moral terms. In the case of China, there's a lot of ideological self-interest at stake for the US.

felipelemos• 7 years ago

It's not incoherent, because the issue with China never was about human rights or censorship.

hassancf• 7 years ago

China is a threat to US economic supremacy. And now they want to become independent from US technology etc... the US doesn’t see it that way.

Saudi Arabia and the other Gulf states are vassals of the US.

Not exactly the same level of threat if you ask me

itsaidpens• 7 years ago

There are massive externalities to Chinese influence from a culture of a city/state side. I think this is a good thing.

dawhizkid• 7 years ago

Anyone else paranoid about TikTok (owned by Chinese co ByteDance)? The fact that it's basically a video recording app it's hard to believe there isn't a backdoor to it.

pigscantfly• 7 years ago

Regardless of the wider debate, it's very sad to learn that Shoucheng Zhang decided to take his own life. He was the only VC I've ever had a legitimate, deep technical discussion with, and I respected him as a scientist.

codephined• 7 years ago

Chinese cash may be toxic in Silicon Valley, but not in Silicon Wadi! Which is why we're deliberately transferring our high-tech sector to Israel. None of this makes any sense for America.

Chinese Cash Is Suddenly Toxic in Silicon Valley, Following U.S. Pressure

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