Chinese investment could bring opportunity rather than threats: US PE fund

BEIJING - Chinese investment in the US tech sector could bring more opportunities than threats and should be viewed from the right perspective, according to a US private equity (PE) investment fund.

Policymakers may bemoan Chinese investment in US companies, but those same investments can provide access and acceleration for small and medium-sized firms to gain a foothold in the largest, fastest-growing electronics market on earth, according to Ray Bingham, co-founder and partner at Canyon Bridge Capital Partners, a global PE fund focusing on the tech sector.

The PE firm's anchor investor is from China and the firm has offices in Silicon Valley and Beijing. It made headlines last year with a failed attempt to buy US semiconductor maker Lattice Semiconductor. The Committee on Foreign Investment in the United States (CFIUS) believed the deal might compromise national security.

In January, the US government blocked Alibaba's financial arm's purchase of US money transfer platform MoneyGram and Huawei's cooperation with one leading US telecom service provider over similar concerns.

"I think that as the US economy realizes the interdependence between China and the United States in particular, they will understand that free and open markets also means free and open capital markets. And the ability for a PE fund whose money comes from China should be viewed as a reasonable and constructive thing," said Bingham.

Canyon Bridge successfully bought UK graphic processor maker Imagination Technologies Group last November. Bingham said the reaction in Europe has been very different than the reaction in Washington as European officials saw the investment as a good thing that could strengthen UK technology jobs and infrastructure.

"We not only bring money, but also help build businesses with our networks all over the world to help companies expand into new markets," he pointed out.

As a veteran in the semiconductor business, Bingham was impressed with the rapid growth of the industry in China.

"When I came into this business, the semiconductor was just being developed, and now there are many foundries and chip factories in China that are producing very advanced semiconductors. Nobody could have seen that 20 years ago," he said.

China consumes about 40 percent of the world's semiconductors, most of which are assembled into products that are then exported to the West, Bingham said, noting that this is a good thing because it forces innovation on both sides of the ocean.

"Allowing the right kinds of foreign investment can help Western companies become players in this exploding market, continue to compete and reap dividends from China's vast innovation ecosystem. But ultimately it's up to policymakers to make smart decisions that allow a constructive flow of capital and keep the economic engine primed," he added.