CNBC China connection bulletin: Didi a Deepseek

This report is from the CNBC Connection Bulletin this week, which gives you information and analysis of what is promoting the second largest economy in the world. Every week, we will explore the largest business stories in China, we will give a reduction in market movements and help you prepare for next week. How do you see? You can subscribe here.

There is a murmur of emotion in China’s risk capital circles these days: foreign investors begin to return with US dollars.

It is the result of the interruption of the AI DEPEEK, along with a floating IPO market by Hong Kong on the way to overcome Wall Street this year as the largest in the collected world. Beijing’s signals to support companies in recent months have also helped.

The wave of the HANG SENG index of more than 20% so far this year reflects short -term optimism. Another sign comes from Chinese risk capital firms that raise funds called US dollars again, after a dry spell in which the VCs had to resort to local investors with Chinese yuan funds.

Bai Capital, based in Beijing, said he began to raise a new fund of $ 800 million in February and plans to close the initial round in September. The firm has the support of the German Global Media Bertelsmann Group.

Bai said he has seen a “strong interest” for the fund called in US dollars, which he will then use to invest in headquarters in China. To date, the company has already invested in 10 companies that plan to make public in the next one or two years.

Future Capital Discovery Fund, an early sponsor of the high -flight electric cars startup Li autoHe told me that he raised a $ 210 million record for a flagship fund called in US dollars in the second half of last year.

“Once there is a fundraising window, we must quickly take the opportunity to raise funds,” said Mingming Huang, founding partner of Future Capital based in Beijing, translated into CNBC. “This is very different from the long -term practice of raising US dollars on the market every few years.”

“Now we need to be very sensitive to macro trends, especially the direction of relations between the main economies,” he said. The firm, which has investors, including sovereign wealth funds and endowments from the Middle East, USA, Europe, Japan and Southeast Asia, has plans to deploy capital for agents and Hardware of AI.

But it has been difficult years for China VCS and its limited partners.

In the world of VC, a company collects money from a variety of “limited partners”, which include sovereign wealth funds, pension funds, university endowments and family offices. While paying to administer the fund, the VC then chooses new companies to support, harvesting a reward of the OPI of the companies that are shared with the limited partners.

The consequences of the IPO of the Chinese Transportation Company Didi in New York in June 2021, on the eve of the 100 of the ruling Chinese Communist Party^th The anniversary, despite Beijing’s multiple warnings about the violations of data privacy, did not sit well with the regulators on both sides of the ocean. Didi was backed by a long list of prominent investors in numerous financing rounds, including Apple, SoftBank and Capital Sequoia.

Later, China would raise the bar for their companies that wish to list the foreigner, while Washington increased its scrutiny of the US capital that is directed to China, cushioning the activity of collection of funds in the continent, particularly for cross -border investments.

In particular, Chinese Capital Sequoia separated from her American father in 2023 and was renamed low HSG. He did not respond to a request for comments on his latest fundraising plans in US dollars. Other VCs that have left or restructured their arms of China include GGV capital, which became Asia Granite, and Matrix, based in California, which renamed its Chinese operations as MPCI last year.

Not everything is the same as in the OPI years prior to Didi.

Instead of giving money to a venture capital company, many limited partners based in Europe, Middle East and Asia prefer to buy bets directly in private companies such as Chinese and Xiaohongshu Internet giants, said Hope Xu, a risk capitalist. She left the code of sources last year to begin her own company, called density 590, focusing on such agreements, known as secondary, which include assets sales for a single asset and participations in funds.

Although Tiktok’s father based in Beijing is not on the public list, the demand for his actions is so high that they are essentially so easy to liquidate or sell, as they would be in an exchange that quotes in the stock market, he said. While sellers tend to come mainly from the United States and Asia, Xu said buyers generally come from the EU, the Middle East or Asia.

It is a great opportunity for returns.

The Bytedance assessment has increased from $ 245 billion earlier this year to $ 340 billion, he said Tuesday, and noted that investors are beginning to accept the uncertainty of the disinversion of the United States.

The Bytedance declined to comment on its assessment.

The company has become a quiet force in China’s kingdom. In addition to having a popular Chinese Tiktok equivalent called Douyin, which surpassed JD.com last year to become the second largest electronic commerce platform for gross sales, Bytedonce has also developed a popular chatbot of the so -called Doubao, along with an Aia Call Coze agent platform.

Xu said that for technological investments such as AI and robotics, resources and capital are huge, which makes new smaller companies difficult. Buying a participation in a large company, such as Bytedance, with its various product lines, is essentially like buying a negotiated fund with AI exchange, he said.

For example, Tencent is not only developing its own AI models and applications, but also investing in new AI companies. He reported an increase of almost five times in the profits of its commercial partners and joint companies last year, which increased from 5.8 billion yuan to 25.2 billion yuan for 12 months, according to the company’s annual report.

The world of China VC does not focus on the domestic market.

Citing the macroeconomic environment and technological trends, BAI Capital said its investments will be divided among new local companies and abroad. Half of their funds will go to China -based companies that seek to expand throughout the world in Fintech, entertainment, AI and supply chains, while the other half of their funds will focus on the opportunities of consumers, health and technology in China, Bai said.

Since 2019, BAI said he has invested in multiple rounds in Stori, a digital bank in Mexico with 3.6 million credit card users and 2.4 million depositors. “We believe that Stori’s success is not an isolated case.”

The question is how long these VC and their limited partners can be excited. The Hong Kong Stock Exchange proudly announced its busiest day for OPI and ETF launches to date: with six gongs on stage.

James Peng, CEO of the Ai -Ai AI Autonomous Management Company, talks about the possible interest of the founder of Uber, Travis Kalanick, in acquiring the US company.

Louise Loo, director of Asia Economics of Oxford Economics, says that, although China’s economic growth is likely to decrease the speed in the second half of 2025 due to the “spectacular growth engine” of exports that cease to provide the same impulse, the same impulse, the silver line in the fact that the demand for the goods of the advanced manufacturing sector of China cannot be easily replaced Easily replacing tariffs despite tariffs.

Angela Stent, main member of Brookings Institution, says that the Russian president, Vladimir Putin, had the support of Chinese President Xi Jinping when Ukraine invaded, and continues to have the economic support and diplomatic support of Beijing in a global scenario.

The actions of Continental and Hong Kong are mixed on Wednesday in the midst of a mixed trade in the region, since investors evaluated the statement of the president of the United States, Donald Trump, having reached a preliminary commercial agreement with Indonesia.

The CSI 300 of Continental China decreased 0.35%, while the HANG SENG index of Hong Kong, which includes the main Chinese companies, had earned 0.15% from the local time of 1:12 pm. The continental reference point has increased around 1.8% year to date, according to LSE data.

July 21: Monthly Decision of People’s Bank of China on the Reference Loan Preface