Softbank Adopts a Wait-and-See Approach in China’s Tech Sector
The founder of SoftBank, Masayoshi Son, revealed that the Japanese conglomerate will be cutting back on its investments in Chinese startup companies until the regulatory scrutiny in China’s tech sector eases. SoftBank’s strategy in dealing with this issue is to adopt a cautious “wait-and-see” approach, with plans to potentially resume investments within one to two years.
Son expressed optimism about China, stating to the Financial Times that SoftBank’s investments in Chinese companies have been and are likely to remain profitable. Nonetheless, he emphasized the importance of exercising caution until the extent and implications of the regulations become clearer, indicating a desire to reinstate investments when the situation stabilizes.
SoftBank Group Chairman and CEO, Masayoshi Son, mentioned, “Various new regulations have emerged in Chinese investment activities, so I prefer to observe the implementation of these regulations and their impact on the stock market.” Link to tweet
— Nikkei Asia (@NikkeiAsia) August 10, 2021
SoftBank has a significant number of investments in China, one of the prominent ones being its 39% ownership stake in the profitable online shopping giant Alibaba. However, SoftBank has been gradually reducing its Chinese investments over the past few months due to escalating scrutiny by Beijing on technology-focused companies, primarily concerning security concerns.
The finance chief of SoftBank’s Vision Fund, Navneet Govil, echoed Son’s sentiments regarding the future of SoftBank’s investments in China, stating, “Our investment strategy for China remains consistent. Chinese innovation potential is vast and evolving.”