BIZCHINA / Key Speeches
Cheng Siwei delivers keynote speech
By Li Huayu (chinadaily.com.cn)
Updated: 2006-04-08 09:49
At 2006 China Venture Capital Forum that opened on April 7 in Shenzhen,
Guangdong Province, Cheng Siwei, vice chairman of the Standing Committee
of the NPC, delivered a keynote speech, in which he briefed on the
development of China's venture capital (VC) industry in the past three
years, elaborated on the differences between domestic and foreign VC, and
introduced the role of government in China's VC development.
He said, the China Venture Capital Research Institute surveyed 180
venture firms in China in 2003, which altogether raised 32.53 billion
yuan in capital, with foreign investments accounting for 5 percent; in
2004, the 141 surveyed venture firms raised 43.87 billion yuan in total,
with the share of foreign capital rising to 15 percent; while in 2005, it
surveyed 150 venture firms, which raised 46.45 billion yuan in total,
with foreign capital taking up 33.9 percent.
He said, in the past three years, 83 percent of foreign VC was invested
in Beijing, Shanghai and Shenzhen, with the percentage of foreign VC in
these three cities being 71.2, 63.6, and 25.4 percent respectively. The
amount raised and invested in the three cities takes up 50-60 percent of
the total VC in China.
Currently there are 183 Chinese enterprises that have sought initial
public offerings (IPOs), with 139 (76 percent) listed in foreign capital
markets (excluding Nasdaq), 40 (24 percent) listed in domestic capital
markets and 25 listed in Nasdaq, he added.
Since the Shenzhen Stock Exchange was opened on May 28, 2004, 50 small-
and medium-sized enterprises have been listed there, with 38 private
enterprises and 33 high-tech enterprises, and the average amount of
capital they have raised is 240 million yuan, according to Cheng.
In terms of the role of government, Cheng suggests that the government
should "support but not control, lead but not interfere" in China's VC
development. He said the country has seen some progress in legislation in
the past few years and in 2005 it revised the Company Law and the
Securities Law.
VC fund is private equity fund and should be raised privately, and
conditions for legislation of private equity fund is getting mature in
China, Cheng said. "Limited partnership is under consideration in the
revised draft of the partnership enterprise law."
He concluded his speech by saying "Although we still have a long way to
go, we are on the right track. As a prudent optimist, I believe
opportunities are larger than challenges. And, in the future, the
government should play a more important role in the development of
China's VC business."
(For more biz stories, please visit Industry Updates)
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