China'S Total Venture Capital Has Shrunk Dramatically

The newly completed survey on venture capital in China shows that the development of venture capital in China is relatively stagnant, and the total amount of venture capital has been greatly reduced.

According to Xinhua news agency, Beijing, August, 3, the survey was carried out jointly by the torch center of the Ministry of science and technology, the Venture Capital Research Institute of the China Science and technology promotion development center, and the venture capital Specialized Committee of the China Science and Technology Finance Association.

In an interview with reporters, Hanting, director of the Venture Capital Research Institute of the China Science and technology promotion development center, said that from the number of venture capital institutions, China's venture capital institutions grew very fast before 2000, and showed a decreasing trend since 2001. In 2003, negative growth occurred for the first time, a decrease of 21.3% over the previous year.

The changing trend of venture capital and venture capital institutions is basically the same.

The report shows that the total amount of venture capital in China in 2002 was 58 billion yuan, down to 50 billion yuan in 2003.

The main reasons for the reduction of total venture capital in 2003 are as follows.

First, because the multi-level capital market is not perfect and the exit channels are not smooth, the vested interests of venture capital have been reduced.

Secondly, the imperfection of the market environment reduces the actual profit margin of the venture capital industry.

The report shows that in 2003, the vast majority of venture capital still concentrated in high-tech industries, but the proportion of traditional industries increased significantly.

According to the amount of investment, 79.8% of the high-tech industry and 20.2% of the traditional industries account for 73.1% and 26.9% of the high-tech industries and traditional industries respectively.

However, it is noteworthy that the proportion of investment projects in China's high-tech industry showed a significant downward trend for two consecutive years, while the proportion of traditional industries accounted for a significant increase, up 12.7 percentage points from the previous year.

According to the survey, 40% of venture capitalists believe that policy uncertainty restricts the development of venture capital.

Secondly, there is a lack of multi-level capital market. At present, China's main board market can not meet the needs of different types of enterprises, especially small and medium-sized technology enterprises.

At the same time, due to the failure to establish the gem and OTC market, the legal person shares can not be withdrawn from the capital market, which has affected the high return of venture capital institutions.

Finally, the tax burden is too heavy.

According to the survey, more than 60% of venture capital institutions believe that the current tax burden is very heavy. 30.6% think the tax burden is moderate, while the tax burden is only 4.2%.

The investigation started at the end of 2003, and all the data involved 24 autonomous regions and municipalities in China.