China should follow a three-step strategy in expanding its venture investment, a Chinese venture capital expert said Monday in Shenzhen.
Cheng Siwei, also vice chairman of the Standing Committee of the National People's Congress (NPC), made the suggestion while addressing a high-tech forum held during the ongoing China International High-Tech Fair in Shenzhen City of Guangdong Province.
According to Cheng, to promote the country's venture investment cause, it is necessary to set up venture investment companies first, then venture investment fund and then second-board market where conditions for stock listing are not so rigid.
China now has more than 90 venture investment companies and venture investment fund exceeds 7 billion yuan (about US$ 843 million ), of which, less than 1 billion yuan (about US$ 120 million) has been into venture investment projects. There is also US$ 300 million of overseas venture investment fund in China.
While stressing a necessity to draft laws to standardize the operations, the leading Chinese lawmaker also warned difference of understanding over venture investment, a lack of standardized practices from project selection to fund raising, a lack of successful examples, as well as participation of few non-governmental funds in venture investment are the major problems that have plagued China's venture investment development.
The Chinese lawmaker said the three-step strategy suits China's national situation. Venture investment companies are expected to assess and recommend venture investment projects to domestic and overseas investors, and to carry out management over the concerned projects at the trust of investors.
China has been drafting detailed measures regarding management of industrial investment funds. As a special form of industrial investment funds, venture investment fund should have special management methods. The second-board market is designed to provide a way out to venture investment, Cheng explained.
He added that China should foster more venture investors of its own starting from training project managers, as venture investors would be a key factor to decide fate of the country's venture investment.
(People's Daily 10/17/2000)
