NPC official calls on more domestic venture capital investment

Cheng Siwei, vice chairman of the standing committee of the National People's Congress (NPC) said Thursday in Hong Kong that China needs to do more to encourage more domestic venture capital investment.

Speaking on a lecture held in Hong Kong Chinese University, Cheng said 80 percent of the current 60 billion RMB yuan (7.2 billion US dollars) venture capital invested in China are foreign capital, and only 20 percent are domestic.

He said this phenomena could pose as huge threat to Chinese companies as these foreign fund invest in and get control of some high-tech companies, they would also become the true owner of the know-how and other intellectual property developed by these high-tech companies.

He took the DVD manufacturer as example. Chinese made DVD player sells at about 40 US dollars, but foreign companies would collect 21.5 US dollars as royalty fee.

He warned if foreign capital continues to dominate venture fund in China, other industry could also experience same nightmare as DVD manufacture.

According to him, China needs to adopt more encouraging policy to increase domestic fund provider's willingness of taking risks.

"While we will not reject overseas venture capital, we should contribute great efforts to encourage our domestic venture capital investment," he said.

The Chinese University of Hong Kong presented a certificate of appointment to Cheng to serve as an honorary professor of the university on Thursday.

Cheng has led and promoted the research and development of complex sciences, virtual economies and venture capital investment, with profound impact on China.

Source: Xinhua