The VC drive to fund Chinese tech start-ups shows no signs of a slow down this first quarter of 2006. Red Herring shouts that it continues at a "breakneck pace." Naturally, the growth of the Internet still offers enormous appeal now that the Middle Kingdom has over 112 million users and is the home to the world's biggest cellphone market with almost 400 million subscribers. Safa Rashtchy, senior Internet analyst and managing director at Piper Jaffray offered CVN these comments after his recently held China Technology and Internet Conference.

"My overall impression was that the portals, while doing well, are loosing some market share but they are fighting back by introducing new services, such as Sina blogs, to catch up with the smaller sites."

Rashtchy does not view this as a major negative trend for portals - it is just the natural growth path. The bullish and savvy analyst maintains that advertising is still in a very early stage in China but it is growing at a healthy clip of 40 percent."

Some observers in China speculate that there may close to 10 million bloggers. In fact, we are happy to note that this site is included among the many China blog sites identified in a compiled new China blog list. In a recent posting by Rebecca Mackinnon, the ubiquitous blogger, cites a Pacific Epoch news item that Chinese blog website Blog president fang Xingdong pronounced at yesterday's IT industry conference in Chongqing that every citizen is likely to have a blog in three to five years.

The once red-hot Bokee, which raised $10 million
last fall from Granite Global Ventures, Bessemer and Softbank Asia Infrastructure Fund (SAIF), is spinning out new business plans almost weekly in efforts to find a way to successfully monetize the site. According to one former Bokee employee, Andy Xiang, a Chinese tech specialist, now engaged in a project with Flock.com in collaboration with Bokee expressed that there's some disaffection with the company. "For anyone who has joined Bokee, it is a huge challenge even greater than what I previously thought. I personally consider it's a good education because nowhere else could provide so much freedom and challenges to a young person, and I have indeed learned a lot... The challenge now seems to be - how long can Bokee continue. Based on what I'm currently working on and know about, Bokee it still has huge potential and is still creating value for its customers. The only danger comes from Bokee itself. It often stops projects what we've been working on for any reason."

Despite controlling over 51 percent of the blog market according to a recent report on the Chinese Internet, Xiang and others believe that Bokee has evolved too quickly from a small raft to a large ship and may not have sufficient fuel to complete its often winding voyage in the political turbulent South China Seas.

As more Chinese blog, it may indeed encourage additional new entrepreneurs like Edwyn Chan, who is still seeking venture capital support for his blog business plan, he currently blogs on Web 2.0 trends in China. Let's watch carefully where the latest VCs are placing those China funds over the next few months.