The March 10 collapse of the Silicon Valley Bank (SVB) sent shockwaves throughout the American economic system, causing stock prices to plummet. The pain, felt throughout the rest of the world, was noticeable in China, where SVB has devoted a considerable amount of resources to fuel China’s technology growth for several decades.
Across the Pacific, SVB is more than just an American institution—they’re an economic powerhouse. They began operations in mainland China in 1999 when former Chinese president Jiang Zeman started a notoriously vicious campaign against the religious movement Falun Gong. Jiang gained control through his support to then Chairman Deng Xiaoping, who launched the Tiananmen Student Massacre in 1989. At the time, China was accused of mass roundups, illegal torture, and forced labor, among countless other atrocities. Meanwhile, rumors of crowded sweatshops and extreme working conditions spread throughout the West. But those offenses weren’t enough to stop Silicon Valley Bank from tapping into what was proving to be an investment goldmine, and they went full speed ahead.
In 2005, SVB established a subsidiary in Shanghai. They then opened a second office in Beijing in 2010, and in 2012, they became the first bank to form a joint venture, partnering with Shanghai Pudong Development (SPD). SPD Silicon Valley Bank became the first joint venture to get a banking license in 15 years in mainland China with the goal of becoming the number one institution for innovation. The tech industry at the time was facing a revolution in smartphone technology. The slogan “there’s an app for that” had become commonplace, and many foreign companies were scrambling for a foothold in the relatively new China market. The Chinese Communist Party was determined to be at the head of the pack by riding with the western ally.
China has since made great strides in increasing its manufacturing capabilities, providing many American tech companies with a majority of their parts at a significant markdown. SVB has been a major player in helping to facilitate the deals. The requirement is that all companies who do business with the joint venture–including those who have borrowed funds from Silicon Valley Bank–are beholden to the Chinese Communist government. That is the rule of doing business with China.
The Chinese government pressures companies into surveilling citizens, requiring them to turn over every piece of data, core business patent, and technology. Alibaba, for example, has a police outpost at its corporate office, which it uses to monitor their users, report crimes, and silence dissidents. Outside the mainland, the Communist government trains its agents to gather technology and information from western entities.
In an interview with the online tech publication Protocol, FBI Special Agent Nick Shenkin spoke about a man whose mother was receiving dialysis treatment in China. The government approached him and threatened to cut her off from the procedure unless he agreed to steal proprietary information from his Silicon Valley employer. Fenkin said that these tactics are standard for the Chinese Communist Party and that Silicon Valley is their primary target. It’s a part of Communist China’s campaign to make new technological advancements, which the government then uses to refine its surveillance methods. The goal is to create an entire country equipped with next-level AI recognition.
Chinese companies, such as Alibaba, Baidu, and Tencent, are leading this new technology warfare, and they have spoken openly about them. At the Communist Party Law Enforcement Commission in 2016, Alibaba’s founder Jack Ma stated, “The political and legal system of the future is inseparable from the internet, inseparable from big data.” He also said that he believes technology will soon be able to predict threats–and, presumably, dissidence.
SVB was one of the first western institutions to offer financial services to China’s tech industry since 1999. It’s long been a major hub of networking between the two markets. In fact, most Chinese companies listed in the US do business with SVB, and all of them fall under the jurisdiction of the Chinese Communist government. That also means the joint venture is funding and facilitating human rights atrocities. They’re handing money to abusive sweatshop owners; they’re helping to expand the country’s mass surveillance network, and they are turning a blind eye to whatever happens insight mainland China.
SPD Silicon Valley released a statement on their WeChat on March 11, 2023, stating that their operations are stable and independent from those of their American counterpart. They remain unaffected by the bank’s collapse, allowing them to continue aiding China in its technology expansion.