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| Justin Sullivan/SAUL LOEB/AFP via Getty Images |
Tom Cotton: Biden Administration Won’t Commit to Not Bailing Out Chinese SVB Investors:
Chinese Tech Startups Panic over Money Trapped in SVB Crisis:
Sen. Tom Cotton (R-AR) said in a tweet Monday that the Biden administration refused to commit to not bailing out Chinese companies that invested in Silicon Valley Bank (SVB) with American taxpayer money.
“It’s well known that SVB funneled American money into Chinese companies,” Cotton tweeted.
“I pressed the Biden administration today to commit not to bailout Chinese companies with money from Arkansas’s taxpayers, but they refused. Which tells you that’s exactly what President Biden plans to do,” he said.
It’s well known that SVB funneled American money into Chinese companies.
I pressed the Biden administration today to commit not to bailout Chinese companies with money from Arkansas’s taxpayers, but they refused. Which tells you that’s exactly what President Biden plans to do.
— Tom Cotton (@SenTomCotton) March 13, 2023
Silicon Valley Bank had supported many start-up companies, including those from China, according to a CNBC report.
According to the report, the bank allowed Chinese mobile numbers to be used for opening accounts and allowed for a week-long vetting period for new accounts for start-ups compared to the three to six months for traditional banks.
Having a bank account with SVB allowed these China-based start-ups to tap funding from U.S.-based investors, the report said. --->READ MORE HERE
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| NOAH BERGER/AFP via Getty Images |
California’s imploding Silicon Valley Bank (SVB) had a number of foreign depositors, including tech start-ups in China.
Chinese firms rushed over the weekend to reassure their customers and investors that their exposure in the SVB collapse is minimal, or that they have enough cash on hand to weather any loss of access to their SVB funds.
SVB attracted Chinese customers through a joint venture called SPD Silicon Valley Bank. The “SPD” in the name stands for Shanghai Pudong Development, the bank that partnered with SVB to launch the venture in 2012.
SPD Silicon Valley Bank issued a statement on Saturday saying that it has “sound operations in accordance with Chinese laws and regulations,” and perhaps more importantly, that it has an “independent balance sheet.”
The main SVB bank does have its own Chinese customers, and according to the Financial Times (FT) on Monday, the bank’s collapse took them by surprise because of the time difference between California and Beijing:
The run on SVB happened so quickly — with $42bn leaving the bank’s coffers on Thursday in the US — that by the time decision makers in China were waking up on Friday morning local time, attempts to rescue their money were already in peril.
“We tried Friday morning, but it was already too late. The transfer is still processing,” said the founder of a Beijing-based tech company with about $10mn in limbo. “It’s very crazy, we didn’t think this could happen.”
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Several China-based venture capital firms said some start-ups in their portfolios faced similar issues of not being able to access funds stuck in SVB outside of China. The bank’s collapse comes at a particularly tough time for Chinese groups raising foreign capital, with the ecosystem whipsawed by Beijing’s tech crackdown, Covid-19 pandemic controls and rising geopolitical tensions with Washington.
According to CNBC, SPD Silicon Valley Bank had about $290 million in registered capital, which represents about 6.8 percent of Shanghai Pudong Development Bank’s total registered capital. --->READ MORE HERE
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