Venture Capitalists Show Enthusiasm For Chinese Market
Venture capitalists entered the Chinese market in increasing numbers during 2004
with unprecedented levels of investment encouraged by several successful exits
from invested projects, a Beijing conference heard last week.
"This year is a turning point for the venture capital industry,"
Zhang Jingan, secretary general of the Ministry of Science and Technology, told
the Zero2ipo China Venture Capital Forum last week. Zhang explained that in addition to the successful initial public offerings of Shanghai-based
Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) and
the country's number one online game developer Shanda Interactive Entertainment,
many venture capital firms were encouraged by successful exits or good returns
from invested projects and began to spend more money. "If we do not include the US$600 million VC investment into SMIC last
year, we can see this year's investment more than doubled and is a very encouraging
figure," observed Zhang. According to Zero2ipo, a Beijing-based professional venture capital industry
research company, VC companies invested US$1.27 billion in China in 2004, compared
with last year's US$992 million. A comprehensive report in our Intelligence Report series examining tax efficient strategies for venture capital is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report5.asp
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