China's Venture Capital Sector Grows, Focuses on Internet
Filed in archive Venture Capital by Greg Cruey on August 18, 2007

The news on venture capital in China originated with a report from Dow Jones VentureOne and is being reported and analyzed at a number of sites and blogs this week. The Ernst & Young Quarterly China Venture Capital Report said that there were 22 separate venture capital deals in the second quarter of 2007 in China involving Internet firms that dealt with some form of information resources. The value of those deals was a record $209 million.
In all, Q2 venture capital investment in China saw 55 deals worth $560 million. That's an average of just over $1 million per deal. Beijing-based ChinaCache saw the largest venture capital deal in the IT sector. That company provides network services for online content providers and is operating in the black. ChinaCache signed a venture capital deal worth over $31 million back in June, according to Atlassets.

The venture capital scene is partly a reflection of continued economic growth in China, according to the Associated Press. Despite higher interest rates and other government attempts to slow the Chinese economy, "spending on factories and other urban assets is soaring," according to a recent AP report. Interest rates have been raise three times in China since March and new restrictions on real estate sales have been designed to limit the access of foreign firms to real estate in China.
Venture capital invest in Q2 was up 49% from the first quarter of 2007.
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