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Chinese Cash Is Suddenly Toxic in Silicon Valley, Following U.S. Pressure (wsj.com)
303 points by antiviral 4 days ago | hide | past | web | favorite | 292 comments





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


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...)


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...


The blatant censorship situation in r/india 'official India subreddit' is similar.

Any user supporting the incumbent government or speaking against Islamic terrorism gets banned.

Similar scenario on r/worldnews. Anti-Muslim posts get removed and users banned, while Anti-Hindu posts get to the front-page.

Not surprising, since there are 3 mods who moderate both r/worldnews & r/india


Moderators on reddit reserve the right to censor their subreddits. This is not censorship by reddit, this is censorship by the users who created that community. Some communities use it quite effectively like askscience and askhistory to limit responses to certified experts, others use to enforce some minimum standard of content and to deter shitposting, while some use it to control the narrative and shape opinion.

In any case, to suggest Chinese influence on reddit censorship, either the reddit admins are doing the censorship, or the Chinese influence is somehow reaching the mods.

No one has made a good case for that that I've seen.


The situation is a nightmare on any "official" subreddit. So much so that I have taken to completely stay of the frontpage, remove all the default subreddits and only explicitly whitelist subreddits based on my interests.

The reddit frontpage is a cesspool worse than 4chan. At least in 4chan people don't try to hide behind fake veneers of moral superiority.


>3 mods who mod both...

Ah yes, conspiracy!

Seriously, it’s like worldnews doesn’t have an army of mods, and senior mods who agree with the actions of their fellow mods.

It can’t have anything to do with the subs and users who are banned from r/India for harassing normal people, islamaphobia, Alls for genocide and so on, right?

I mean, it’s not like there’s THREE right wing pro govt Indian subreddits which constantly harangue and badger the main sub, attack ABCDesis and are coordinating some sort of absurd propaganda war to make it seem that r/India is.... what?

No no. It’s a conspiracy.


Islamic terrorism? Indian Army is killing a number of people in Kashmir daily and still Muslims are terrorists?

Indian Agency RAW is the major sponsor of terrorist attacks and still Muslims are terrorists.

Muslims are being killed in Palestine by Israel and still Muslims are terrorists.

US attacked Afghanistan for oil and still Muslims are terrorists.

US threatening to attack Iran and still Muslims are terrorists.


Other people doing bad things does not negate that Muslims also do bad things. I hate this deflection/whataboutism as if it means anything.

On another note,

>Muslims are being killed in Palestine by Israel and still Muslims are terrorists.

>US attacked Afghanistan for oil and still Muslims are terrorists.

>US threatening to attack Iran and still Muslims are terrorists.

You can talk about and criticize all three of these things freely if you want, without worrying about being retaliated against physically by extremists or being censored by platforms who are afraid of the lashback if they fail to do so as Muslims are somehow a protected minority.


https://www.reddit.com/r/pics/comments/byjify/arial_view_of_...

A lot of comments still up are even more directly critical of Beijing than that post. Mods flagged it for "vote manipulation."

So I don't know what to make of this.

A sympathetic voting ring could have boosted the comment without the commenter knowing, confusing everyone here.

Or maybe Tencent really is picking specific posts to complain about to Reddit admins, or planting mods in high profile subs (but those mods can only catch so much).

Is there any way to sample which comments have been deleted by mods, to see if there's a consistent bias?


You can change `reddit.com` -> `removeditt.com` to see (some) of the deleted comments on a thread.

https://www.removeddit.com/r/pics/comments/byjify/arial_view...


I stand by my belief that reddit is one of the worst sites on the net and far far worse than Facebook when it comes to reinforcing echo chamber mentalities.

I stopped visiting the site after the pulse shooting in Orlando when moderators deleted my post listing blood donation facilities in the Orlando area.


Speaking of Reddit, a citizen of Hong Kong had a post this morning make it to the front page giving out a bit of info about the protest. Nearly half the comments were purged by the mods. Reddit had gone down hell in the last few years, but this was something else.

Aren't all Reddit subs driven by their own moderators? Or are there core subs that are Reddit-moderated?

I had a lawyer friend who liked to post in a legal advice sub, moderated by someone in law enforcement, who banned him for posting information about your rights if you're arrested.


The lion share of subs are moderated by a relative few mods. There was a post showing the graph of control recently, I found it disturbing. Unfortunately Reddit has critical mass now, I think it can survive what ever it becomes. It could lose every user who wishes it was like the first 5 years and hardly notuce. There won't be a Digg moment for Reddit.

Many dominate players on the internet have been kicked to the curve. It starts with complacency which lack of real competition seems to always create.

Does Reddit have a system to appeal mod decisionmaking for important (and not so important) subreddits?

I think Flickr had this back when they were a big property. You'd have site admins look at your complaint and follow up as necessary.

It's be nice to have and if they have it that it'd be more active to keep things from going off the rails --within reason.


The blatant censorship situation in r/india 'official India subreddit' is similar.

Any user supporting the incumbent government or speaking against Islamic terrorism gets banned.

Similar scenario on r/worldnews. Anti-Muslim posts get removed and users banned, while Anti-Hindu posts get to the front-page.

Reddit should make atleast the 'Official Country' subreddits from obvious bias/influence.


I suspect that Reddit intentionally keeps the moderators of core subs a group of "normal users" (who will follow any requests by the admins) as a level of obfuscation for any corporate-driven censorship or vote-tampering.

I would agree with that, especially for their biggest and most influential subs like /r/news and /r/politics. Reddit's owners have shown they're not above selling out some of these subs to firms like ShareBlue. It would make sense as part of their contract, they'd ensure that the mods were 'suited' to their customers' goals.

Shareblue was banned from r/politics and a bunch of other popular subs long ago.

Linking to the domain was banned. I doubt reddit has the technical capabilities to effectively prevent them from continuing their alleged bot/vote-manipulation activities.

And I suspect there's a secret cabal of mole-men (and -women) who are selecting presidential candidates for the Democratic primaries.

Are either of these claims falsifiable?


Yes, their claim can be easily falsified by a full investigation.

What is the answer if the result of said investigation is "well, we have no direct evidence"?

That has no bearing on if the claim is falsifiable or not.

> falsified by a full investigation

Unless it's a term I'm not aware of, a full investigation is still limited to human actors and limits.


The result of the investigation isn't a factor in determining if a claim is falsifiable or not, only the question if the investigation is possible. This is confusing falsifiable with falsified.

A full investigation by whom? They've broken no laws. Voluntary? Ha.

I realize what the parent was attempting to say, but internet rumormongering is poor form.


>A full investigation by whom?

The scientist seeking to determine if it is falsifiable. That no scientist has the resources necessary to do so now does not have bearing on determining if some claim is falsifiable or not.


I consider claims in which there is no realistic path to falsifiability non-falsifiable.

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.


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.

If you're an SV sweetheart it's easy. Otherwise it depends on the business.

are these public channels?

Gophers, hangops, Google Cloud Platform, to name a few.

(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.


" 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.


> 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.


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.

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.


The shift can influence on easy a admin/mod will ban certain thread and comments if content "diss China". Again, like how the action of Israel is rarely (never) mentioned by politician.

There was a time when r/politics was generally about the US politics. Now it's been almost only "Trump is bad" content for several years.

Incidentally, Trump is the strongest "be wary of China" voice in US politics.

To be fair Trump doesn't inspire the "freshness" neither the fairness of his POV.

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

"We" is the US Government.

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


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.


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

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

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.

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.

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.


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

Absolutely nobody but a very select few people would care. YC is not even on the radar of lots of tech start-ups or their founders, the world is a lot larger than what you might think from hanging out here. And that's with full knowledge of the sea change that YC has brought for founders and the absolutely incredible number of companies it has generated, there are still many more people - and founders - in the world that have never heard of YC compared to those that have.


> Absolutely nobody but a very select few people would care.

Are you kidding me, it would be on the front page of the Journal. People would care after that.


The typical news cycle lasts about 48 hours. People have no problem remembering what 9/11 was all about because it was the top item for over a year. Now ask them in what year it was and see if you get the right answer.

If YC has to stop doing business in China, it will be a very momentary blip and China will most definitely not change course because of a PG blogpost.


I think you're eliding the fact that technology development and specifically startup growth are current strategic priorities for the PRC, and making a straw man by framing my argument as "China will change course because of a PG blogpost".

And also, do you really know multiple people who do not know what year 9/11 happened? C'mon


> I think you're eliding the fact that technology development and specifically startup growth are current strategic priorities for the PRC, and making a straw man by framing my argument as "China will change course because of a PG blogpost".

It's not a strawman when that is exactly what you wrote:

>> 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.

>> Absolutely nobody but a very select few people would care.

> Are you kidding me, it would be on the front page of the Journal. People would care after that.

YC is incredibly important to the start-up world but strategic priorities of the PRC aside if YC leaves China then that's not going to move any needles. If Google isn't powerful enough to make a play there you can just about forget what influence YC has there. To think that PG can influence Chinese policy with a blogpost is ridiculous.

> And also, do you really know multiple people who do not know what year 9/11 happened?

Yes. They typically know it was somewhere in the early 00's but not what specific year. It baffles me, but it is about as solid a fact as I have about this given that I've tried this many times now. Feel free to conduct your own little experiment and see what happens. I think in part it is because everybody always talks about 9/11 without adding the year.

Edit: FWIW: I just checked one more person and they did not in fact remember what year it was, only be linking it to some event in their own life were they able to make the connection.


Tsoris means stress or suffering. A front-page article in a major American newspaper saying that the world's pre-eminent tech incubator was pulling out of the Chinese market due to political pressure would constitute a major loss of face and, yes, cause stress within the CPC leadership.

I didn't say that this would drive a policy change after the fact. Quite the opposite, it would likely result in some kind of drama related to the CPC digging in its heels and attempting to recast the drama in a nationalist context. But, the initial loss of face would still be bad from their perspective.

I do think that YC/PG do in fact have some leverage/deterrence power with regard to being politically pressured by the CPC leadership because of their ability to walk away from the table in a publicly embarrassing manner.

Does that clear things up, and do you agree or disagree?


I don’t think China, the people or the ruling party, care much at all about YC. Of course there would be minor caring if something hit the front page of the journal about “YC quitting China”. But it would have to be such a minor thing. I wonder why you think China would care about such a tiny organization, relatively speaking (wondering in earnest).

Not the person you replied to be wow, you have no idea how little China cares.

When you say "China" do you mean the average person on the street there or the CPC leadership?

Given the number of fuerdai in elite US schools, you really don't think that the CPC leadership would care about a public spat with YC?

I'm not trying to be right here, I'm honestly curious and would be honored to be disabused of my ignorance by a more informed perspective.


Both. China is a country of 1.4 billion people, they're detaining hundreds of thousands of people for no good reason in Xinjiang, they execute or imprison political enemies and are building artificial islands in the South China Sea in order to turn international waters into Chinese sovereign waters. The scale of that place will blow your mind. A single city like Guangzhou has 50% more people than the entire Bay Area.

You really think a single VC company that plays no critical role in national security is even on their radar?


YC is so tiny compared to so many things. I don’t think it would be a spat because that to me means China would respond or there would be [serious] rumblings within the ruling party.

> Now ask them in what year...

I know that. May I answer ? It's 2003... November 9, to be more precise.


Given the month/day joke I can't tell if the other part was intentional or not... but it was 2001, not 2003.

I don't even know which "Journal" you're talking about.

Paul Graham is not as well-known or influential as you think.


Wall Street Journal

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 ?


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.


> Saudi Arabia would exist with or without American support

At the same level? I have my doubts. If they weren't a close ally of the US, terrorist financing/leading stings would be going much further. Would they be able to do their thing in Yemen without US support? Or would they be a pariah on the world stage because of their acts, which are hard to tell apart from those of ISIS/ISIL? Not that I'm a big fan of the Iranian Mullahs and their backwards idea of how to run a society, but they appear somewhat moderate compared to the wahabi style.


Things would be significantly different in hard to predict ways. I'm just saying that "Saudi Arabia wouldn't exist without America" is extremely wrong.

[flagged]


Radicalization financing is nothing new from KSA and is not confined to madrassas of India. South East Asia, Europe and Americas have seen their fair share of this.

As far Iran sanctions and oil imports of India is concerned that is largely collateral damage.

USA and India have complicated relationship, at the surface level they should be allies but at the second level India's in-cohesive politics and financial reforms have added up such a way, US does not see a reliable partner in India and India's interests do not overlap with US given its neighborhood.

There are other parties to blame outside of Americans for the religiously charged climate in India.


Would you please stop posting political battle-style comments to HN? Also, this Barbaria thing is flamebait; please don't do that here.

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


Why do you keep writing Barbaria instead of Arabia? At first I thought it was a typo, but you keep using it. Is that how Arabia is spelled in your native language?

I had the same question. I think it's a way to throw a jab at the kingdom's treatment of female citizens.......

Might be referring the the fact that it is a barbaric tyrannical state.

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.

China's also a dystopian oppressive oligarchy. Should we be doing business with them? I think we shouldn't, but given how deeply their hooks are into our economy, there's not much choice at this point.

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.

So is the US a terrorist state because it funded the mujahideen and terror linked groups even until recently in Syria?

The US was funding terrorists fighting terrorists, so that's back to being ethical again. /sarcasm-but-not-ahistorical

Honestly, yes.

The United States meets its own definition of a rogue state.


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

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


The entire news article appears like typical american hitjob. There is no evidence whatsoever that Iranian state is linked to this man, heck no evidence about Hezbullah either.

At any rate none of this is different from what Saudi citizens have been doing for years in Europe and USA.


It was a Lebanese group. In that sense America is linked to every tyrant in Middle East, ISIS etc. America has always been the agressor in Iran relationship.

Even extremist Shia Iranians, from what I have read and heard, view Wahhabi Sunnis as radical.

> 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.


>> 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...


Yes, the narratives keep on changing and there are various political camps that have different opinions because... politics. I had no idea my view was dated, thanks! I guess the pendulum swings back and forward every number of years. But to get to the main point about the "Olympic committee from recognizing Taiwan as a separate nation", there's definitely no overwhelming consensus yet, even by the Taiwanese themselves, that their government should form an independent country!

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.

Could you elaborate? What made it toxic?

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.

The concept of IP rights doesn't really exist in Chinese business culture. Your source code or any other proprietary technology is fair game.

I know startup founders that have raised Chinese money and not regretted it, but it's important that it be "dumb money", i.e. they give you cash and go away while you write an occasional investor update and grow the business. Active Chinese investors (i.e. anything where you give up board seats, decision-making power, strategic partnerships, etc.) are bad news. You want to be in a position where if your investors ask you for something you can just ignore them.


> You want to be in a position where if your investors ask you for something you can just ignore them.

What reasonable investor would put themselves in that position? They're just going to give their money away and not have any say in what happens?


Ones who expect that the company in question is going to do well regardless of what they do and trust management to make good decisions on their behalf.

This is the same position that every retail investor, every LP of a venture or hedge fund, every shareholder of a company where the founder controls a majority of voting stock, and every person with a pension or 401(k) puts themselves into. You could argue about whether that's a stupid thing to do, but it's the vast majority of shareholders within the world, so stupid or not, lots of people do take that bargain.


This is quite standard in my (limited) experience. We're raising a seed round and I've spoken to nearly 100 VC firms. The most any have asked for is an observer seat.

I mean yes that’s pretty much how 90% of deals in the valley happen?

We also had Chinese VCs ask to review our code (their value proposition was access to Chinese hospital data). Also "system design interviews" asking to essentially how everything works in technical detail, and would work for future expansion plans.

We do tech DD, and also occasionally review code so that's pretty normal. We do take great care to ensure that no secret sauce ever makes it into our reporting, and if the situation requires it do a second round of reviewing before sending out the report to the party that commissioned it. I'm not saying we will never ever leaks bits but if you take your reputation serious in this field then you will do what is possible to ensure that the proprietary stuff stays just that in case there is no deal.

Any VC that asks non-independent third parties to review your code should be shunned.


(their value proposition was access to Chinese hospital data)

Whose value proposition to whom?


Brit here. Reviewing source code before a purchase is pretty normal.

I've personally done this for multiple companies that the enterprise I work for has purchased.

In all cases it was a 1-day review, while supervised by someone from the company being purchased.

It seems perfectly reasonable to get an idea of the state of what you are planning to purchase.


Without NDA?

No, there was of course an NDA :)

You were surprised that China has red flags?

(Thank you, I'll be here all week)


I find jokes are rare on HN, but I'll always upvote one that makes me chuckle

I think people here avoid puns and offtopic humor on purpose, so that it doesn’t distract from the discussion. I like this aspect of HN.

Not only that, but we also avoid inflammatory posts, affirmations without proofs/research to back them up, criticism without offering help & better suggestions...

That is a big part of what has helped HN last so long without following Reddit down the path of becoming a cacophony of puns, memes and references.

Where are you next week? This is a show I'll travel to follow.

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.

To be fair, toxic business relationships are far from exclusive to China.

Absolutely. They could have been US investors and had the same issues.

Yes, please elaborate. +1

> 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'.


Toxic how?

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.

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.


> 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


America will not only send its soldiers to burn your country to the ground, years later they will also make a Hollywood movie about how bad those soldiers felt about it, and how much they suffered.

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"?

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

Yes, I meant the original plans for the remake.

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.

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.

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...


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.


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

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

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

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

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.


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.


  >> 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

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..."


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?

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

July 2016? Are you sure? If I was a US company, I'd certainly be cautious of overseas investment from China. Everyone knows they don't respect IP or Copyright laws, steal technology, and more. You would want to very carefully weigh the risks before doing business with a non-democratic nation, even outside of this administration's policies. Anyone planning on doing business with the US Government would be very aware that China is not an ally.

https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...


CFIUS was established in 1975, got extensive powers to block deals in 1988, and even in 2013-2015 20% of their cases involved China.

Ehhh.. no, not really. Not to anyone watching China beyond what appears in the mainstream headlines.

Things have been on a strong downtrend since 2012 and alarms have been ringing loud since around 2014.

Edit: Anyone writing a business plan including sensitive technology sales to the US government should DEFINITELY have seen this coming in 2016.

Edit2: Also, candidate Trump had loudly been yelling about China for over a year at that point


> Things have been on a strong downtrend since 2012 and alarms have been ringing loud since around 2014.

Can you elaborate?


The short version: that's when Xi Jinping took power and started very quickly undoing all kinds of moves toward moderation and reform that had been undertaken by the previous few leaders.

He ramped up control over the population, consolidated power for himself and cracked down on dissidents/party criticism.

The 2014 bit is more subjective, but going from memory that's when I started to regularly see semi-mainstream technology, business and politics publications focusing on problems/concerns with China.


Seems like many of those who provide services to the government are familiar with the Berry Amendment and the implications of the “qualifying countries” list.

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.

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.


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.

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.


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

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


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.


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.

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.


I agree with you. But that was never an issue when US companies invested in China. It appears that cooperating with authoritarian regimes is fine as long as it is your nations companies that comes out on top.

Yes. I definitely want the companies of the US to come out on top. Or the companies of any country that has a decent human rights record.

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

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.

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.

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.

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?

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).


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.


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.

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.


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-...


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

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

Equity has power and influence over companies.


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.


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.

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...


“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.)


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).


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

Thanks for this! I dislike identity politics when used as a bludgeon for the sake of power. However, many of the phenomena talked about are indeed real.

There's one Brazillian rom com, where the Chinese boyfriend was something of the "bad guy" or at least the punching bag. There's nothing about the character that's actually characterization. It's all about his being an Asian guy, who furnishes his apartment in a stereotypical "Asian" fashion, teaches martial arts, only ever wears his martial arts uniform, and makes gross noises in the bathroom. Wish I could remember the name of that movie.

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).

It also works like this for Irish and Scottish guys with that "cute accent."


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.

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!


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?


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

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!


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. ;)

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

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

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


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.


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.


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.

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.

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

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.

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

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

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.

They were screaming bloody murder about Japanese investment in the 1980s. Most of the complaints were the same, and some of the characters were even the same:

> We should have Japan and we should have Saudi Arabia and we should have all of these countries who are literally ripping us off left and right.... They should pay for our $200-billion deficit.... We are supporting -- we are literally supporting -- Japan, which is the greatest money machine ever created, and we created it to a large extent. -Donald Trump

> There is going to be a tremendous backlash against what Japan is doing in this country -- sucking the lifeblood out of it because of our stupid policies. Our policy is to have free trade, but Japan is not reciprocating. -Donald Trump

There were complaints about Japan not opening its domestic market to American products, about Japan buying up American companies, about cheap Japanese knockoffs of American products, and about Japanese companies being tightly connected with the government. The phrase back then was "Japan, Inc.," rather than today's "China, Inc."

Interestingly, while Japan was criticized for copying American products, the hysteria about Japan really took off as Japan began competing seriously with the United States in high-tech sectors. There's a clear parallel to China there. Now that Huawei has invested heavily in R&D and leads in 5G equipment, we suddenly hear about Huawei stealing Cisco IP in the early 2000s (the two companies settled in 2004, and one of the major claims was that Huawei copied an implementation of strcmp). China has become more serious about protecting IP and now invests as much as the US in R&D, but the issue of IP theft is suddenly urgent.

Given the demographics of HN, it's probably difficult for most people here to imagine this, but in the 1980s, there was palpable fear in the United States that Japan was taking over. There was a general angst about the United States being displaced as the #1 world power, but there was also fear of the rival's inscrutable and ominous culture.


> Nah, nobody is complaining about Taiwanese or Japanese investment, so that is moot point...

FYI: xenophobia =\= racism


I don't understand the point of this FYI. GP's logic applies to both and answers both.

One can be xenophobic against a nationality without being racist against a race that happens to be predominant in the said country. You don't have to be racist against asians (incl. Japanese and Taiwanese) to be xenophobic to the Chinese. Parent only provided for proof against racism - not xenophobia, which is why I noted the difference. I am not commenting on the absence or presence of either racism/xenophobia in this particular case: I'm only noting an important difference.

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

Too bad none of us can actually read minds, so we'll never know. If there's a charitable assumption about the state of someone's mind that the facts don't contradict, then it should be taken.

It's funny how many people are emotionally attached to the delusion that they are psychic. I honestly wonder where they got that idea.


Sinophoia, rather than xenophobia

Sinophobia, to quote Snicket, is a word which in this sentence means, not wanting to do business with China for national security and geopolitical reasons having nothing to do with race.

There's a fair dose of racism involved, just as there was with the very similar hysteria over Japanese investment in the 1980s.

The same attitude applies to Russians and I doubt you can call racism on that one. Seriously, Chinese call up the racism card far too often for unrelated things for me to take those statements seriously.

I'm not Chinese, but thanks for assuming (I'm from Sinope, but I consider myself a cosmopolitan and reside in a barrel in the Athenian market).

As you correctly point out, there is a hysteria about Russians at the moment, as well. I think the US is primed for this because of the long history of anti-Russian propaganda during the Cold War.

When it comes to China, I see all sorts of extra negative characterizations of Chinese people coming into play. I've seen threads here on HN which people go on about how Chinese students are cheaters, and how Chinese culture promotes cheating. That's just an outrageous and ignorant characterization of Chinese culture, and I do think it represents a type of widespread prejudice.


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

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.

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.

[flagged]


That's just a tu quoque fallacy, as venture capital being indifferent to making the world a better place does not mean it is ethical to do business with China.

“does not mean it is ethical to do business with China.”

what kind of business?


If it's up to me, doing any business that aids the Chinese government is unethical.

Hopefully you would say the same about the Saudi's who regularly behead people in public, supress journalism and of course, have we forgotten Khashoggi. Similary the American Military has done crimes against humanity.

Bush should have been convicted of war crimes considering he ordered the military to ignore the geneva convention,

Remember that Abu Gharib's runners' were given a demotion for committing war crimes and America has laws to prevent their soldiers being punished for war crimes.

Have a read of the wikipedia page on Bagram Torture and Prisoner Abuse. The autopsies of the prisoners showed that their legs were in a condition to that similar of someone run over by a bus, they were reportedly chained to the ceiling. However, the worst punishment to anyone involved in the torture of those prisoners is of 5months prison time.[1] Also, the American Military denies the existence of a black jail at Bagram but BBC confirmed in 2010 that such a place still exists with convicts still contained in the prison.

https://en.wikipedia.org/wiki/Bagram_torture_and_prisoner_ab...


Why though? You could just make a bunch of whataboutism's that prove the USA has the very same horrors that China does in its own economy. Why the double standard? As someone pointed out above, this seems like xenophobia and not much else. They don't pose a war threat and any war would be initiated by USA.

No, there are no current day U.S. equivalents to the Uyghur reeducation camps, the ethnic cleansing of Tibet, and the extreme censorship.

What's more, there is no evidence that China is even capable of changing course on these matters, given that their reaction to all these is to deny that they're even real, even suppressing the merest mention of them.

Notably, this is not what the US does with its own wrongdoing, as even extreme anti-government sentiment is allowed to be freely expressed.


Starting the Iraq War, starting the (Still on-going, in case anyone forgot) Libyan Civil War, fanning the flames of the Syrian Civil War are all crimes against humanity, with a pretty horrendous body count. Is it internal repression? No, of course not. Did it add misery, death, and suffering to the world on an industrial scale? It absolutely did.

And, notice that how regardless of whether team Red, or team Blue get elected, the ship seems to be unable to change course on those matters. Hell, a decade later, three quarters of the ship's steering committee don't even consider that course to be a mistake.

Just because we're a representative democracy, of sorts, doesn't mean that we are capable of course-correcting.


Just because we're incapable of course-correcting, doesn't mean we can't express our discontent and have a discourse about it.


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

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.


"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.

This article introduces a new term 'structural' for describing the US trade deficit.

Essentially if a country is to have their currency as the world's reserve currency then they have to run at a deficit.

Since all those extra dollars that get printed go overseas they are not in the US economy to cause price inflation, i.e. too much money chasing too few goods.

https://qz.com/1266044/why-does-the-us-run-a-trade-deficit-t...


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.


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.


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

> 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.


Why would you post the paywalled version of the link?

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



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.

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

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

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-...


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.

Equally likely they notice the thundering herd of non-subscribers accessing a select few articles through a particular hole in their subscription wall. Surely can't be that hard for them to track.

Created an account just to thank you for this tip.

Oh that's cool. Thanks mate!

The real unsung hero!

When is WSJ I don't even click anymore.

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).


The problem for me is always which ones? If I were to dig through my browsing history and plot a frequency/frecency list of news-ish sites I visit, I don't think I'd see a small few dominate the list. I wouldn't mind throwing a couple bucks a month at the sites at or near the top, but I can't justify giving each of them even $5/mo, and certainly not the $10-$30/mo most publications charge for memberships. I just don't get that much value out of each one.

I'm still a big proponent of a micropayments system where my browser can automatically send a single- or double-digit amount of cents to the publisher (with my permission, of course) when I read an article. But I have no expectation of something like that gaining traction.


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In the era of fake news and clickbait, I'm very happy to shell out some coin for quality news. I've found WSJ to be one of the most objective newspapers out there (along with BBC) since they focus on describing what happens, rather than adding in lots of conjecture.

The opinion pieces are another story though (pun intended), I generally try to avoid those.


Most larger mainstream news with political objectives can also be defined as fake news with a major political bias due to the profits they need to create to stay afloat. Business comes before accuracy in reporting. WSJ and BBC are probably great & accurate for stories about plants and polar bears, but anything of any major significance will be extremely biased in the favor of profit.

https://en.wikipedia.org/wiki/Propaganda_model


Never mind that BBC is funded by royal charter rather than by customers, so they get paid whether people read them or not.

You're confusing accuracy with bias. It is possible to give an accurate account of a story despite having a bias, so long as you're still stating the relevant facts. The bias comes from the interpretation and whether they state the facts in a positive or negative light.

As for biases, WSJ is known to be center-right, NYT is center-left, The Economist is biased towards classical liberalism, etc. When you read the stories you can take the bias into account pretty easily.


It's precisely because the WSJ has a paywall (since 2007 IIRC) that it's not a "garbage site". That dubious honour would go to the hordes of medium.com and elektrek.co links who give their information away because, well, exposure is better than nothing. You get what you pay for.

It's still annoying. I subscribe to the NYT and WaPo. I can't even logistically subscribe to every news site I might get linked to. WSJ is the most obtrusive I've seen in terms of being restrictive towards non-subscribers. And there's STILL no micropayments solution that's widely adopted.

That is an interesting point. The reason I don't subscribe to NYT and WSP is that they don't have a 1-click cancel option.

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)


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

Click the 'web' link.

that hasn't worked in a long itme

I get them through my employer.

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?

"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.

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

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.


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


National security Vs not

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

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