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China and other Asian countries can expect to see a larger amount of venture capital investment coming in from overseas starting this year.
The latest information shows much investment has interest in China. This includes plans for the Advent International Corporation to invest about US$10 million and IDG, one of the first American venture capital companies to come to China, to invest about US$1 billion in the coming years, according to speakers at an international forum called IPO China 2001, which ended yesterday in Shanghai.
The speakers attributed the increase in overseas venture capital interest in China to the country's stable economy.
"China, like India and several other Asian countries, was less affected by the world recession, and is now attracting worldwide venture capitalists who can't find good projects in America or other parts of the world," said Kevin Chan at the forum.
Chan is head of technology investment for Advent International, one of the largest private equity investment firms in the world.
At the same time, he believes that the valuation of high-tech companies in China, like in other parts of the world, is also decreasing.
"This is, therefore, the right time for venture capital firms to make investments in high-tech companies," Chan said.
However, overseas venture capitalists are still very cautious about moving into the China market.
One of the biggest problems preventing overseas venture capital firms from investing is that the country still lacks suitable market exit systems, Chan said.
"Delays in establishing the second board are a disappointment for overseas venture capitalists, who hope to fund Chinese high-tech start-ups," he said. "That it is still difficult for overseas-invested companies to go public on the Chinese mainland's main board is another hindrance."
Overseas venture capital firms are also worried about how they go about changing their profits from renminbi into hard currency, if they invest in China.
(China Daily 04/25/2001)
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