China’s tech investments continue to slide, dragging down global activity in venture capital sector

China’s tech sector continues to see reduced capital investment activity which in turn is having a knock-on effect globally, with new data showing the country’s deal volumes down for a fifth straight quarter.

Investments targeting the country’s “new economy” continued to slide in the second quarter, down 62 per cent year on year to 154.3 billion yuan (US$22.4 billion), although the pace of decline slowed quarter over quarter, according to a report by the Beijing-based information service provider ITJUZI.com.

An April report from venture capital data provider Crunchbase pointed to a weakening market for Chinese start-up equity in the first quarter as a principal contributor to overall global declines. North American companies were not immune, with the number of US and Canada-based start-up investment rounds across all stages hitting its lowest point in five quarters.

Crunchbase said the overall market for start-up fundraising remained strong but the industry is “very late into a historic cycle” with many of the biggest unicorns set to graduate to public markets.

Chinese investment deals in artificial intelligence slumped 63 per cent year on year in terms of value, with the sector closing 30 financing deals compared to 55 in the same period last year.

The chill extended to other high-profile tech sectors including data services and semiconductors, both of which saw reduced fundraising activity and smaller investment volumes compared to a year ago, according to the report. ITJUZI didn’t specify reasons behind the drop.