The collapse of Silicon Valley Bank (SVB), which courted Chinese start-ups, has caused widespread concern in China, where a string of founders and companies rushed to appease investors by saying their exposure was insignificant or nonexistent.
SVB, which worked with nearly half of all venture-backed tech and healthcare companies in the United States before it was taken over by the government, has a Chinese joint venture, which was set up in 2012 and targeted the country’s tech elite.
The SPD Silicon Valley Bank, which was owned 50-50 owned by SVB and local partner Shanghai Pudong Development Bank, said Saturday that its operations were “sound.”
“The bank has a standardized corporate governance structure and an independent balance sheet,” it said in a statement. “As China’s first technology bank, SPD Silicon Valley Bank is committed to serving Chinese science and technology companies, and has always had sound operations in accordance with Chinese laws and regulations.”
It’s unclear what will happen to SVB’s ownership of the joint venture.
SVB Financial Group, the parent company of SVB, also has two business consulting firms and one financial service firms in mainland China, according to corporate database Tianyancha.
Concerns about the failure of SVB have spread around the world, as investors fretted about the broader risks to the global banking sector and any potential spillover effect.
In an extraordinary move to restore confidence in America’s banking system, the Biden administration on Sunday guaranteed that customers of SVB and Signature Bank, which was closed by regulators, will have access to all their money.
That action appears to have appeased global markets, with US futures rallying in response and some Asian markets paring earlier losses.
In China, at least a dozen firms have issued statements since SVB collapsed trying to pacify investors or clients, saying that their exposure to the lender was limited. Most were biotech companies.
BeiGene, one of China’s largest cancer-focused drug companies, said Monday it had more than $175 million uninsured cash deposits at SVB, which represents approximately 3.9% of its cash, cash equivalents and short-term investments.
“The company does not expect the recent developments with SVB to significantly impact its operations,” it said.
Zai Lab, a pharmaceutical firm, announced that its cash deposits at SVB were “immaterial” at about $23 million.
The closure of SVB “will not have an impact” on the company’s ability to meet its operating expenses and capital expenditure requirements, including payroll, it said.
Other companies that publicly assured investors included Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, CStone Pharmaceuticals, Genor Biopharma and CANbridge Pharmaceuticals.
Mobile ad tech firm Mobvista and wealth management firm Noah Holdings said their cash holdings at SVB were “minimal” or “immaterial.”
Popular selfie app Meitu said it hadn’t held any bank accounts at SVB since 2020. It issued a statement “to avoid any potential public misunderstanding.”
Ascletis Pharma, MicroPort NeuroTech, Antengene Corp, and Suzhou Basecare Medical Corporation also denied they had any deposits or business dealings with SVB.
Pan Shiyi, co-founder and former chairman of Soho China, a major Beijing-based property developer, denied he had any money at SVB after reports went viral on social media that he had lost billions of yuan.
“We never opened an account with Silicon Valley Bank, nor placed a deposit,” he said late Sunday on his Weibo account.