Common sense seems to be breaking out for Chinese tech valuations. A long-running trade conflict with the US and concerns about the domestic economy have cut back the value of domestic start-ups — which is good news for investors.

This is some turnround since early last year. Back then, companies were raising money at valuations that were a multiple of previous rounds, while their investor backers were happy to write ever larger cheques, get their funds fully invested and then raise new funds even bigger than the last.

At that point, SoftBank’s Vision Fund, set up in 2017 and holding almost $100bn in assets, had flooded early-stage companies with cash, pushing up valuations. Sequoia launched a $8bn global growth fund in 2018. Hillhouse Capital, an investment firm specialising in hedge funds, private equity and early-stage investing, raised more than $10bn for a fund that broke KKR’s record for a Asia-focused private equity strategy.