Improvement Of Attracting Foreign Risk Investment Environment Strategy Study

Foreign venture capital ("VC") development in China is indeed slow since its first access in early 1990s. The main reason is due to China's imperfect investment environment for foreign VC. This dissertation initiates from the introduction of VC conception, VC characteristics and foreign VC features, provides definition and general analysis on key components of investment environment for foreign VC, including economic development situation, legal framework, policy layout, business circumstance and financial systems. The description of performance and basic environment of foreign VC in China indicates though China has stable economic development basis and certain conditions for foreign VC, the overall investment environment is not adequate. Such as conflict of laws, imperfect business circumstance, ignorance of foreign VC practice for local target companies and lack of VC exit mechanism. From the analysis on the necessity and feasibility of perfecting investment environment for foreign VC, as well as the experiences of other countries, the author illuminates the importance and raises four strategic measures to perfect investment environment for foreign VC: Firstly, to perfect legal framework and policy layout for foreign VC; Secondly, to strengthen China's VC service system; Thirdly, to accelerate the internationalization of Chinese small business companies; Lastly to build up flexible exit mechanism for foreign VC. The implementations of above four measures will not only facilitate the development of foreign VC in China, but also make it possible that foreign venture capitalists will play a leading role in Chinese VC industry in near future. These efforts will satisfy both Chinese economic development and the upgrade of its VC industry development level.