Washington's tech policies will help China claim innovation high ground

SOME US MEDIA report that China has suspended its investing in Silicon Valley under mounting pressure from the US government investigation. Some worry that China will withdraw all its investment from the tech valley. Li Zheng, a researcher in US studies with the China Institutes of Contemporary International Relations, comments in an article for Outlook, a think tank owned by Xinhua News Agency:

The retreat of Chinese capital from Silicon Valley fits in exactly with the US government's wishes. The US Congress passed the Foreign Investment Risk Review Modernization Act in August last year, which entitles the Committee on Foreign Investment in the United States to extend its tentacles to venture capital and nonholding strategic investment, and the committee can now also customize its treatment to different countries. The US has also passed its Export Control Reform Act, which includes advanced technology in its export controls.

All these moves affect China. Apparently, investing in Silicon Valley is no longer a wise choice for Chinese investors. The problem for the US is that the capital from the other countries might not be able to fill in the vacuum left by China. Imposing restrictions on Chinese investment will backfire.