The article discusses the current state of venture capital (VC) activity in China, particularly with regards to US-based VC firms investing in Chinese startups. According to a report by PitchBook, VC activity with US participation in China is expected to hit a nine-year low in 2023 and a decade low in 2024.

The article highlights several factors contributing to this decline:

1. Regulatory uncertainty: The Chinese government’s increasing scrutiny of tech companies has created an uncertain environment for startups.
2. Geopolitical tensions: The US-China trade war and ongoing diplomatic tensions have made it more challenging for US-based VC firms to invest in China.
3. Competition from local investors: Chinese VCs are becoming increasingly active in the US market, competing with their foreign counterparts.

As a result, many US-based VC firms are shifting their focus towards other markets or exploring alternative opportunities within China. Some notable trends and observations include:

• Chinese VCs venturing out: Many Chinese VCs are now flying to the Bay Area to source deals, leveraging their extensive networks in the US market.
• USD fund managers seeking new opportunities: With the decline of VC activity in China, USD fund managers are looking for alternative markets to explore, such as Japan and other emerging economies.
• The Middle East becomes a new hub: Some Chinese VCs are sourcing capital from the Middle East, potentially limiting the impact of US investors’ pullback.

Overall, the article suggests that the VC landscape in China is undergoing significant changes, driven by regulatory uncertainty, geopolitical tensions, and increased competition. As a