China's venture capital's emerging industry has struck the gong for much needed reforms for domestic venture firms at the sell out China Venture Capital Forum
now being held in Shenzhen with over 1000 attendees. Sure, this discussion does reaffirm the purpose of this blog to educate and inform more global investors on these prescient trends: China's policy drivers have full intentions to reform its nascent venture capital industry, liberalize the listing requirements for domestic startups and increase the available research and development funding for science parks.

According to an article in the Red Herring, "of the total of 183 Chinese venture-backed IPOs to date, 76 percent, or 143 were in foreign capital markets, and only 24 percent (4) were domestic claims the father of China's venture industry, Cheng Siwei, Vice Chairman of National People's Congress.

Siwei's keynote address was bolstered by the voice of Xu Guanhua, the Minister of Science & Technology, who also sounded a clarion call to the communist Party to dramatically relax listing requirements for Chinese companies so they no longer have to go offshore.

Of course, there are many reasons for the short march of Chinese venture capital liberalization. Professor Haiyang Li, Assistant Professor at the Jesse H. Jones Graduate School of Management at Rice University commented on this trend in a recent e-mail to CVN.

"I believe that the rush of venture capital funds into China's technology industries is driven by two types of factors: domestic and international. From a domestic point of view, over the past 15 years, many Chinese technology firms have been growing very fast and they are facing "bottleneck" right now in terms of managerial capabilities, strategic market selection and financial support."

Many western investors believe that the increased entry of China venture capital funds might solve some of these problems.

The key point sounded at the opening day forum is China's ambitious goal to increase funding for research and development by 2010 to almost $112 billion. The view from both academics and industry watchers is that the Chinese government's mandate on proprietary innovation over the next decade sends a clear signal to the capital markets that China Inc. expects to see more technology entrepreneurship.

Expect to read here about a flood of deals to be announced over the course of the next few months.