Sequoia splits, Honduras grows ties with Beijing, and China’s financing in Southeast Asia

Here’s what else you need to know about China today:

The venture capital giant Sequoia Capital will split off its China and India operations from the U.S. parent company in the face of growing geopolitical tensions. Sequoia is famous for its lucrative early bets on companies like Google, AirBnB, ByteDance, and Shein. The three new independent entities will be Sequoia Capital in the U.S. and Europe, Hongshan in China, and Peak XV in India (Peak XV is an early name for Mount Everest).

The news comes as reports continue to show that China-focused venture funds are struggling to raise funds from global investors, due both political and economic factors.

Honduran President Xiomara Castro is headed to China this week in the leftist leader’s first visit to the country after Honduras dumped Taiwan and established formal diplomatic relations with Beijing in March.

China is Southeast Asia’s single largest development partner, financing about $5.5 billion a year between 2015 and 2021, with about 75% of it going to infrastructure, according to a report by Australia-based think tank Lowy Institute. But China’s financing has declined in recent years, and while it still remains far ahead of other global players, competition is growing from the multilateral development banks, Japan, South Korea, and Europe.

There is also a large gap between what China commits and what it actually gives: Between 2015 and 2021, China signed projects worth about $12 billion a year — three times more than both the actual disbursements and the value of the infrastructure projects signed by Japan, the next largest player.

The U.S. is preparing to address China’s “growing aggressiveness,” National Security Council spokesman John Kirby said at a press conference yesterday, after Washington accused a Chinese destroyer and aircraft of “unsafe” maneuvers around the Taiwan Strait and South China Sea in the past week.

Meanwhile, the State Department said that American and Chinese officials held “candid and productive” talks yesterday during a meeting between Sarah Beran, National Security Council senior director for China and Taiwan Affairs, and Daniel Kritenbrink, assistant secretary of state for East Asian and Pacific Affairs, with PRC officials. Kritenbrink is the highest-ranking American official to have publicly visited China since an alleged Chinese surveillance balloon was shot down in U.S. airspace in February.

Global scrutiny is growing over China’s covert security operations overseas: Two Chinese expatriates and a former New York police sergeant are currently on trial in New Jersey for allegedly intimidating a U.S.-based fugitive to return to China to face bribery and embezzlement charges. Meanwhile, governments in the U.S., the U.K., Canada, and elsewhere are pushing for more legislation to tackle China’s alleged network of more than 100 secret overseas police stations.