China Matters: China Encourages Formation of Domestic Investment Funds
By Maurice Hoo, Tony Chen, David Wang and Wilson Chen
On November 15, 2005, the National Development Reform Committee of the People’s Republic of China issued the Provisional Measures on the Administration of Venture Capital Enterprises, which is expected to become effective on March 1, 2006. On the surface, Measure No. 39 applies only to domestic venture funds and should have little direct impact on international venture investors. However, Measure No. 39 appears to encourage the formation of a domestic venture fund industry in China, which may ultimately level the playing field and alter the landscape of venture investments in China.