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Venture capitalists eye startups in China

Xinhua Financein BEIJING
2015-10-12 17:00

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Venture capitals from America's Silicon Valley have seen opportunities to cash in on the lucrative startup market in China.

"Western analysts are less bullish about the Chinese economy. But if you ask most smart investors, 90 percent will agree that the Chinese economy will be bigger in 10 or 15 years," said Allan Young, founder of Topline, one tech and startup incubator in San Francisco's East Bay area, told Xinhua on Sunday.

Under government incentives, innovation and entrepreneurship help upgrade China's industrial structure and create new jobs, Young said on the sidelines of the Global Entrepreneurship Conference which opened on Sunday. He also added praise for social media and gaming development in China.

Topline invested in a diaper company last October in East China's Shandong Province that uses bamboo fiber to produce biodegradable, anti-bacteria diapers. It is currently in negotiations with a medical firm in the southern city of Shenzhen on a men's fertility product.

Young is working with two partners to start a new fund in China and is talking to potential Chinese investors as limited partners. "We will help American companies go to China and Chinese companies go to the United States," said Young, adding that he is looking for projects that are new and unique, as well as scalable.

Mike Rothenberg, 30, founder of Rothenberg Venture, told Xinhua that the Chinese market was "very different, very big and very valuable."

The Stanford alumni had been to China twice for the past two months to forge connections and learn about the market. Rothenberg Venture invests in frontier technologies, virtual reality (VR) and augmented reality. "Chinese companies are very strong in VR.

Chinese investors know a lot about VR, especially gaming. We will look into gaming and entertainment first," said Rothenberg, who is consulting on government policies with Yu Jun, head of Haidian District, where many innovative start-ups are located. Yu welcomed Rothenberg to set up a branch in Beijing and share the dividends of China's startup boom.

The Chinese central government has emphasized reforms and innovation to steer the economy toward a more sustainable long-term path. A wide range of measures for emerging businesses have been unveiled, including financial support, facility construction and administrative assistance. In the first half of 2015, new enterprises registered a total capital of 12 trillion yuan (1.9 trillion U.S. dollars), up 43 percent from a year earlier.

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