Strategy On Development Of Venture Capital Market In China

In the aspect of system, the author analyzes the major problems at present in venture capital in China and puts forward some suggestions to improve it. Emphasis is put on the framework of venture capital organizations and effects of incentive and constraints that limited partnership has on venture capital market of asymmetric information.Firstly, based on the mature experience of developing venture capital in foreign countries, this paper makes clear the role of government. It is not only the capital supplier, but also a manager whose responsibilities are forming policies, improving relevant laws to provide a good environment for high-tech enterprises. On the one hand, the government shall retreat from the innovation investment project with its direct participation. On the other, it shall introduce non-government and foreign capitals to enrich investors and expand investment in China.Meanwhile, the paper analyzes the roles of other participants in venture capital market in China, including corporations, security dealers and evaluation agencies and so on. As the important parts, they also have influence on the development of capital market.In the aspect of venture capital market, the author analyzes its framework and roles of each participants, aiming at establishing a perfect venture capital system. That is under the protection of laws, there is an effective incentive structure and the participants can play their own roles and constraint each other so that an efficient venture capital market may be established.