Declining Investment in China
According to a recent press release by Dow Jones there has been declining investment in China at the end of last year. The report notes a more than forty percent fall in venture capital infusion. Direct investment in China has been popular if not always profitable for years. A major issue that we have written about previously is the lack of true transparency in many mainland China investments.
Over 2012 as a whole, investing in China fell roughly forty percent according to published figures. China saw deals valuing less than $4 Billion as compared to deals valuing just under $30 Billion in the USA. Venture capital investing in China is largely a matter of foreigners investing in Chinese companies as they go public. Venture capital investing prior to companies going public is somewhat murkier, the non-transparency issue again.
How Is Declining Investment in China Divided Up These Days?
According to the Dow Jones press release, consumer services get the most venture capital. In 2012 there were fewer than a hundred deals representing $2 Billion in venture capital. The second largest recipient of venture capital in China is information technology which saw just over forty deals last year amounting to just over half a billion dollars. These two sectors led in the declining investment in China with roughly forty percent falls each from 2011.
Unlike the two top sectors, business and financial services investment rose by a couple of percent with around $450 million invested in twenty-seven deals.
Other sectors seeing a fall in investment are health care, utilities, and energy companies. These sectors in aggregate brought in just over $300 million in twenty deals. These sectors fell as a group by about forty percent.