Chinese firms try to calm investors after SVB's collapse

March 14, 2023 2:11 am

While US banking regulators announced on Sunday evening that they would backstop all deposits at Silicon Valley Bank, the bank's sudden collapse has still caused anxiety in the Chinese market.

Multiple technology firms that have exposure to the bank quickly moved on Monday to reassure their investors that the SVB issue might not have any significant impact on them.

Known for its willingness to take risks on startups and emerging technologies, SVB has been a popular choice for many Chinese companies seeking dollar financing for decades.

Beijing-headquartered BeiGene on Monday said it has 3.9% or about $175 million, of cash frozen in the bank. The Nasdaq-listed company said it "does not expect the recent developments at SVB to have a significant impact on its operations."

According to CNBC, mobile ad tech firm Mobvista and wealth management firm Noah Holdings have stated that their cash holdings at SVB were either "minimal" or "immaterial." Other companies, such as Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, CStone Pharmaceuticals, Genor Biopharma, and CANbridge Pharmaceuticals, also publicly reassured their investors that they were not significantly exposed to the potential impact of SVB.

Despite the fact that their deposits are currently protected by US regulators, some businesses are still considering or have even started moving their money out of the bank.

CB International Bank, a US-based bank that primarily serves Asian SMEs, told Reuters that it has been contacted by a large number of start-ups and US dollar funds looking to open accounts quickly in order to deposit funds that they have withdrawn from SVB or intend to withdraw.

Sam Su, chairman of the bank, has stated that the institution is encouraging businesses to diversify their risk exposure by moving some of their U.S. Dollar assets into offshore Renminbi deposits.