Photo: CFP

Chinese tech startups attracted record high investments in 2021 despite China enhanced regulations on its tech industry, the Wall Street Journal reported on Thursday, noting that China remains popular as an investment destination.

"Venture-capital investors put $129 billion into more than 5,300 startups in China in 2021, higher than the market's last record of around $115 billion for 2018," the report said, citing data from investment database Preqin. 

The record levels of investment, in fact, are not surprising given that Chinese economy remains stable and resilient amid the COVID-19 pandemic. Additionally, the developing prospect of Chinese technologies remains promising despite the blockade of Chinese firms by the US.

Meanwhile, the record capital inflow to Chinese tech startups did offer a perfect refutation of the West's vilification on China's enhancing regulation over some of its internet giants. Instead of intending to "crack down" on tech giants or the private sector as some Western media and politicians asserted, China's strengthening oversight is aiming to cultivate a healthy, fair and sustainable growing environment for internet industries.

While enhancing regulation on tech giants has become a mainstream among rich countries, the West, holding double-standards, has attempted to distort China's intentions to strengthen regulation and took the chance to badmouth the prospect of Chinese economy.

In fact, Chinese internet industries were experiencing a rapid expansion with related market regulation lagging behind. The absence of proper regulations generated a series of controversies on topics, ranging from unfair competition to over long working hours, which damage the legitimate interest of employees and other industrial players.

The roll out of regulations measures was not targeted against any of the tech giants or attempted to clamp down on the private economy. Instead, they are a crucial step to guide the healthy development of the private sector with large firms shouldering their social responsibilities, small firms having the opportunity to enter the market and grow, and consumers enjoying better services.

The move will better stimulate market vitality since a great number of small industrial players can contribute to innovation and a healthier environment, in turn, offers a more sustainable growing prospect for large tech firms.

Moreover, the colossal market in China is offering great opportunities for innovative technologies to be commercialized which would further boost tech innovation subsequently. Not to mention China's stable economic environment amid the COVID-19 pandemic when most of the developing countries are seeing shrinking capital inflows.

Foreign investment flows into China scaled to a new high in 2021 to 1.15 trillion yuan ($181 billion), up 14.9 percent year-on-year, according to the latest data from China's Ministry of Commerce. 

Under such circumstances, it is not hard to understand the confidence of global capital on Chinese tech industries, although the US has been viciously cracking down on Chinese tech firms putting them on its so-called entity list or launching unreasonable restrictions on US-listed Chinese firms. 

Even in semiconductors, one of the most sensitive sectors, another report by the Wall Street Journal in November 2021 revealed that American companies and their China affiliates are ramping up investment in Chinese semiconductor companies despite Washington's ill-intentioned efforts which have mounted risks on bilateral economic exchanges.

"US venture-capital firms, chip-industry giants and other private investors participated in 58 investment deals in China's semiconductor industry, from 2017 through 2020, more than double the number from the prior four years," the report said.

Facts speak louder than words. In this case, capital flows offer a better answer for whether Chinese technology or Chinese economy is promising or not. Sounder market regulations are fostering a healthier business environment and the outside blockade will not dampen the prospects of the Chinese technology industry. 

The author is an editor with the Global Times. bizopinion@globaltimes.com.cn