Updated at 6.45pm:
Venture capitalists identified the mainland as the most popular destination in Asia for investment, with over 90 per cent of mainland and Hong Kong VCs saying they would invest in the next year, though lack of exit opportunities, low quality of investments and concerns about the regulatory system were identified as obstacles to investment, a recent survey revealed.
Fifty-eight per cent of respondents to the survey, conducted by law firm CMS Cameron McKenna, claimed they were more likely to invest in China in the next 12 months and 39.5 per cent said they would invest in the next three years as a result of China's entry into the organisation.
Responses suggested that the growing interest in China comes at the expense of other investment centres such as Singapore and Korea.
According to Chris Southorn, corporate partner at CMS Cameron McKenna, China's WTO accession has predictably bolstered venture capital projects. ''There is an opportunity for venture capitalists to invest ahead of the next wave of international investors,'' he said.
According to Tommy Yip, a research editor at the Asian Venture Capital Journal in Hong Kong, local firms are beginning to consider the mainland market ''their'' market and increasing feel that is where they should be investing. ''Since IPO and M&A are the two mainland exit opportunities, foreign investors still have trouble.'' Lack of understanding and access, Mr Yip said, hinders the foreign investors. ''It is the local firms that have the advantage,'' he said.
Mr Yi added that international VC companies would have a harder time navigating mainland investments.
