A Study Of The Development Of Venture Capital Of China

Venture capital (VC) is a class of investment in those corporations with high growth potential,high risk and high returns. A lot of studies have showed that the development of VC can not only propel the development process of high-tech industry of a country or region, but also can accelerate the industrial upgrade and transformation. After reviewing the literature on VC, I found that governments of many countries or regions worldwide have played a significant role in the development of VC. In this thesis, I firstly introduced the history and current status of the development of VC in China mainland and then I implemented a regional clustering analysis of the development of VC in different territories of mainland China and found that there exist clear differences in the development levels of different areas, and many factors have resulted in the differences. Then I analyzed the influencing factors of VC, and got an order based on comparative analysis of the influence of these factors. The result showed that government support is the most important among those factors. In order to accelerate the development of VC in mainland China, we analyzed the good experiences of those developed countries and regions, especially those of Taiwan. I found that the VC development of mainland China and Taiwan began at almost the same period with development level in Taiwan at a clear advantage compared to mainland China. VC played an especially important role in the transformation from a labor intensive economy to a capital and knowledge intensive economy; and all these can not happen without support from the government. To sum up, in order to realize the propelling effect of VC on accelerating the development of high-tech industries and propelling the industrial transformation and upgrade in mainland China, the crucial thing is what a role government should play in supporting the development of VC.