China H1 venture fundraising to hit lowest in at least 8 years
JanuaryMay venture deals lowest since 2020
Unstable economic recovery, SinoU.S. tension among risk factors

BEIJINGHONG KONG, May 31 Reuters Chinafocused venture capital fundraising is heading for its weakest first half year in at least eight years, data from researcher Preqin showed, as a teetering economic recovery and SinoU.S. tensions unsettle investors and startups.

Concern about the impact of a weak business environment on startups39; prospects and valuations means a turnaround in fundraising may take time as venture funds take longer to evaluate potential deals, investors and advisers said.

The current market presents bifurcated fundraising paths U.S. dollar funds continue to face a challenging environment with their much more riskaverse investors while RMB yuan funds are increasingly relying on stateowned or governmentbacked investors, said Weiheng Chen, senior partner and head of Greater China practice at law firm Wilson Sonsini.

Geopolitical derisking overhang and economic uncertainties have also been impacting the deal making, he said.

The drop reflects a turn in fortune for startups in China after years of rapid growth fuelled by ample funding. U.S. security concerns and titfortat trade restrictions have left dollar investors on the sidelines while domestic yuan funding diminished amid China39;s postCOVID19 economic woes.

U.S. dollardenominated fundraising focused on China has reached 610…