Investors around the world are pouring money into China for the first time in years, per Bloomberg

International investors are cautiously returning to China’s start-up ecosystem, signaling the first signs of recovery for a sector long constrained by geopolitical tensions and Beijing’s technology crackdown.

People familiar with ongoing fundraising efforts said several of China’s leading venture capital firms are nearing completion of up to $1.1 billion in new dollar-denominated funds this year. Source Code Capital, an early backer of TikTok parent ByteDance, has raised $150 million, while BA Capital, known for its investment in Pop Mart — the maker of the Labubu toy line — is close to securing a similar amount. Lightspeed China Partners, which invested in PDD Holdings, has attracted more than $200 million for a still-open fund, and Qiming Venture Partners, a major biotech investor, is progressing toward its $600 million fundraising target.

While these totals remain small compared with past years, they mark a tentative revival of global capital inflows into Chinese tech. The rebound follows a period of deep investor caution driven by Washington’s outbound investment restrictions and a slowing Chinese economy. According to data from Preqin, China-focused VC funds raised just $1.3 billion in dollar funding in 2024, far below the $30 billion raised during 2021–2022. Renminbi-denominated fundraising remains more accessible and continues to sustain many domestic start-ups.

Despite that, the shortage of foreign investment has left many promising Chinese ventures valued far below their U.S. counterparts. “The top Chinese robotics companies would probably be valued five to ten times higher if they were in the U.S.,” said Xing Meng, partner at 5Y Capital in Shanghai. Meng noted that China’s robotics sector — spanning autonomous lawnmowers to AI-enabled devices — benefits from a deep reservoir of engineering talent and a complete domestic supply chain. To adapt to geopolitical frictions, fund managers are now raising dollars from investors across Asia, the Middle East, and Europe, not just the U.S. Meanwhile, renewed signals from President Xi Jinping, who in February pledged to improve the business climate, have helped restore some investor confidence after years of regulatory pressure.