Curbs on China could hit Detroit and Silicon Valley

US President Donald Trump’s threat to block Chinese investment in US companies could be trouble for a number of American automotive and technology companies using Chinese funds to develop electric and self-driving cars and related services, from Tesla Inc to dozens of Silicon Valley start-ups.

Chinese companies in the past five years have funded at least 80 US transportation start-ups, with a combined valuation of more than $100 billion, while also pouring billions into established firms such as Tesla, according to a Reuters analysis of publicly available data.

Likewise, US corporations and private investors have funded at least 60 Chinese start-ups – 16 of them so-called unicorns, valued at $1 billion or more – often co-investing with their counterparts in China.

Many of those investments are focused specifically on two key areas of future transportation: electric vehicles and automated vehicles. Electric and self-driving vehicles also are expected to underpin the next wave of global transportation and services in the 2020s.

For now, US lawmakers and Trump appear to be focused on the money flowing into the US from China, while expressing concern about advanced technology flowing back to China from the US, the report said.

More than 20 Chinese companies – including internet giants Tencent Holdings Ltd, Alibaba Group Holding Ltd and Baidu Inc, as well as State-owned SAIC, China’s largest automaker – have offices in California’s Silicon Valley and have funded a broad spectrum of US tech start-ups focused mainly on electric and self-driving vehicles.

US automotive companies, among them General Motors Co, have invested in Chinese transportation start-ups.

Critical backing also has been provided by US venture firms, notably Silicon Valley stalwart Sequoia Capital, which has seeded at least 20 Chinese start-ups in the transportation sector, often co-investing with one or more Chinese partners.