Foreign capital in China is facing security concerns.

As tensions between China and the West continue to escalate, some foreign investors with joint ventures in China are facing security concerns due to various handicaps.

According to a report by Radio France International (RFI) dated September 4, 2023, investment bank Goldman Sachs, which operates in China, is experiencing security concerns because of its joint venture with China's sovereign wealth fund.

Reportedly, the U.S.-based investment bank Goldman Sachs had previously purchased numerous companies in the United States and the United Kingdom through a joint venture fund with China's sovereign wealth fund. Among these companies is a cybersecurity firm that provides services to the UK government. According to the British Financial Times newspaper, the company's business of researching direct foreign investments from Western countries into China, especially investigations into countries receiving investments from China, has come under pressure from the Chinese communist regime.

Financial Times reporters recently obtained detailed information from several individuals with direct knowledge of the fund and its operations. This information revealed that Goldman Sachs and China Sovereign Wealth Fund Investment Co. established a private equity investment fund in 2017. The fund reportedly raised $2.5 billion in investments, and Goldman Sachs financed seven subsidiary companies through the fund.

Business Target Index, a startup that tracks global supply chains, recently disclosed the involvement of various companies in this context. These include a cloud computing consultancy, a pharmaceutical testing company, and an artificial intelligence provider. They also mentioned companies that produce systems for supplying batteries to drones and electric cars.

According to Financial Times, Goldman Sachs has not denied any allegations, and it hasn't even mentioned whether the deal is supported by state capital, at least from China.

These companies facing allegations were initially involved in the establishment of the China-U.S. Manufacturing Cooperation Fund, which was announced when former U.S. President Trump visited China in November 2017, with China Investment Corporation and Goldman Sachs as participants. These funds were primarily tasked with attracting investment into American industries.

The Financial Times reports that amid the increasing tensions between Beijing and the West in recent years, Goldman Sachs has accelerated the fund's activities by making investments four times in 2021 and once last year. One of the companies, Lawson Group, which provides quality assurance, auditing, and consulting services in the United Kingdom, has raised concerns about security breaches due to the presence of Chinese capital in the company.