China's Venture Capital Funding Heads For Ten
Industries
The ten most popular industries for venture capital funding
in China are electronic communications, biotechnology,
manufacturing, financial services, materials science,
healthcare, software, environmental protection and safety,
light optics, new energy resource development and healthcare
equipment. These results were based on a survey by the
Chinese Venture Capital Research Institute.
The survey was based on investments made by 170 organizations
in more than 340 projects, and included Series A investments.
Most investments were directed at electronics, including
computer, internet and communications, chip design and
other IT-related areas. Following this were biotechnology,
pharmaceuticals and healthcare equipment. Manufacturing
and financial services got almost the same amount of investment,
forming three main areas for investment.
Most of the investments were made in Shanghai, Beijing
and northern China. Nearly forty percent of the investments
were made in Beijing, followed by Shanghai with 33 percent,
and Shenzhen with 30 percent. In Beijing, the companies
are situated in Zhongguancun; in Shanghai in Zhangjiangyuan
and in Shenzhen in Gaoxinqu.
Most of the VC investments are led by the Chinese government.
The Chinese government led in 92 projects, or 48 percent.
Private investors were in 52 projects or 27 percent. Project
funded by Chinese state-owned enterprises were 26 (14%),
and non-Chinese entities were 20 (11%). Investments led
by the Chinese government and state-owned enteprises dominated
at 62 percent. Most of the funding came from the Chinese
government and Chinese enterprises with 74 percent of
the total funding amount.
In China, state-led venture capital funding is directed
mainly at meeting immediate market needs. Because the
government and state-owned enterprises continue to play
a leading role in China's economy, a successful partnership
with a leading state-owned enterprise can lead to successful
takeup and breakout for a new product/service.
Before you go, did you like this article?
If so, you can receive a free email newsletter version
each weekday. Sign up using the China Business Express
form on this page.
