Can China Tech Find a Home in Silicon Valley?

One Saturday evening in late July, more than 100 people attended an elaborate party in the lush garden of a mansion in Silicon Valley. The host was David Wei, a former chief executive of Alibaba, the Chinese e-commerce giant, and now a venture capital investor. Guests, most dressed in white, were offered Panama hats as the bright California sun set and models walked a catwalk between large round tables covered with white cloths.

Many of the guests were current or former investors or entrepreneurs in China’s tech industry. Their conversations, like those at a number of similar gatherings in Silicon Valley this summer, bounced among three topics: how little confidence they have in China; how many opportunities artificial intelligence presents in the United States; and how they can get into the game on this side of the Pacific.

Chinese tech professionals are moving to Silicon Valley for opportunities they don’t believe are available in China anymore. They’re part of a wave of Chinese companies “going global,” as a growing number of businesses look outside their home country for growth.

With China’s economy in a lasting slump, investors and entrepreneurs are seeking the next China. They feel unwelcome by their government, which in recent years has sent an ominous message by clamping down on private companies. The heightened tensions between China and the United States make it tough to operate as a Chinese-based business with international ambitions. There are opportunities in Southeast Asia, the Middle East and Africa. But only one other market can compare to China in size and potential. That’s the United States.

Most eager to make the jump are the venture capitalists. They used to be able to raise money from funds managed by America’s university endowments, retirement pensions and wealthy individuals, and then invest that money in Chinese start-ups. They helped give rise to China’s tech industry, backing Alibaba, Baidu (internet search), Xiaomi (smartphones) and Didi (ride hailing). When these companies did public stock offerings, the venture capital investors reaped bountiful returns.