London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Tough US immigration policy could be the key to China winning technology race, says top AI investor

China wants world leadership in artificial intelligence by 2030, and Sinovation says bringing Chinese talent home from US will be part of that effort. Venture capital firm’s president says there will be more investment in basic science research

China’s technology race with the United States could frustrate its efforts to develop artificial intelligence (AI), while Washington’s anti-immigration policies would allow Beijing to catch up by building a strong talent pool, a top Chinese technology investor has said.

Ning Tao, president and partner of Sinovation Ventures, one of China’s leading venture capital businesses with a focus on AI, said that while US President Donald Trump’s administration may use the 16-month trade war to stall Chinese technology companies by limiting their access to US-made chips and other key components, it would not stop China from hiring the best talent in the field.

The US has accused China of stealing intellectual property and unfairly subsidising its tech firms. It has also blacklisted Chinese tech giant Huawei from buying American components, and has since moved to targeting smaller Chinese start-ups
“The US has always imposed restrictions on the export of American technology to China. Whether it is IBM or Microsoft, they have always limited our access to higher-end processors,” Tao said at the Understanding China conference in the southern city of Guangzhou, an event staged by Beijing think tank the China Institute for Innovation and Development Strategy.

Those restrictions have had a bigger effect in recent times because there were more Chinese tech firms, particularly start-ups, Tao said.

“This has created a crisis for us which tells us the importance of investing more heavily in basic science research,” she said, “This will certainly slow us down, and the development in some areas could even be stalled for a time until we come up with the solution.”

Sinovation, founded in 2009 by Kaifu Lee, a former senior Google executive, has been at the forefront of China’s rapidly growing AI industry.

With offices in Beijing, Shanghai, Nanjing, Guangzhou and Shenzhen, Sinovation has invested in more than 300 start-ups, including photo-editing app Meitu and Mobike, a bicycle-sharing app.

It was also one of the first to feel the heat of the US-China tech war, when a unit of the US defence department highlighted Sinovation in a report titled “China’s Technology Transfer Strategy” in January 2018. It called the firm “a great example of an active Chinese venture firm investing in the US” in areas such robotics, computer vision and virtual reality.

This month, Washington set its sights on Chinese tech start-ups, adding 28 organisations to a blacklist following concerns about their role in Xinjiang. They were blocked from buying American products.

Eight on the list were AI tech firms, including facial recognition specialist start-up Megvii Technology, which counts Sinovation Ventures as one of its backers. Lee, an early Megvii backer, wrote in a book published last year that the start-up was “a world leader in facial and image-recognition technology”.

Lee’s firm got out of the US market amid an increasingly hostile business environment towards Chinese firms, closing its American branch after the head of its Silicon Valley office departed in late 2017.

“We decided to open an office [in 2013] in Silicon Valley because it would allow us to learn about the latest technology and new business models. We also aimed to bring American entrepreneurs into the Chinese market,” Tao said. “But because of the new laws caused by the trade war, our investment there was met by increasing limitations, so we decided to close the office.”

As part of the escalating trade war, the US stepped up its scrutiny of Chinese investments by increasing the scope of the Committee on Foreign Investment in the US to review non-controlling stakes and investments in addition to takeovers.

In November 2018, Lee told Bloomberg information service that he was considering scaling back investments in the US if relations between Beijing and Washington continued to deteriorate.

About 95 per cent of the firm’s money had been invested in China, and Lee was quoted as saying “that could easily be 98 or 100 per cent”.

He said US policy was forcing his firm to “look for smart, technical Chinese people in America and bring them back to China”.

Tao said that as a US government crackdown on foreign influence spilled into academia, taking a toll on Chinese or Chinese-American researchers, China could benefit from Trump’s anti-immigration policy.

“While the US is driving talent away, it is the perfect time for us to race to bring them back to China.”
This talent, Tao said, would be the key asset in fuelling China’s rise in the field.

The Chinese government wants world leadership in artificial intelligence by 2030, when the domestic industry is forecast to be worth about US$150 billion.

With the proliferation of AI technology-based applications in recent years, the huge trove of data produced by China’s consumer market has given Chinese AI companies an advantage over their US counterparts.

But China will need breakthroughs in core technologies and research theories to cement its leadership position.

“As Chinese tech companies advance, there are fewer and fewer [examples] for us to emulate and to learn from. We have now become the leader, so this has created a pressure for us to break new ground, and the key to finding new direction through basic research,” she said.

“We rely on scientific and tech talent in achieving breakthroughs, so it is of the utmost importance that we attract more talent. The advance in theories made in academic papers is not something that can be banned or restricted by one country.”

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×