FT News Briefing China’s start-up winter is here
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Sep 16, 2024 The discussion delves into the stark decline of China's startup ecosystem, with venture capital investments plummeting from over 50,000 new companies in 2018 to just around 1,000. The shift reflects economic pressures and changed investment strategies that leave entrepreneurs facing bleak prospects. Additionally, concerns are raised about an EU law on deforestation potentially causing global disruptions in palm oil supply chains, as Indonesian producers fear the consequences of proving their sustainability practices. This nexus of finance and environmental policy creates a compelling narrative.
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China's Startup Winter
- China's startup environment is grim, with VC funding drying up.
- This is due to economic slowdown, political pressures, and US sanctions.
Politics and VC Funding
- China's VC slowdown is linked to politics and state scrutiny of investments.
- This has led to conservatism and a debt-averse mindset among investors.
Impact of Geopolitics
- Increased scrutiny from Beijing and geopolitical factors like US sanctions hinder Chinese IPOs and M&A.
- VCs are now making safer bets, focusing on less scrutinized sectors like manufacturing.