The VC market is very active in China with the first 11 months of 2010 surpassing comparable figures from previous years.
Gavin Ni, president of event organisers Zero2IPO, at the start of the conference said there was a 57% increase in VC funds raised, with an aggregate of $10bn commited.
The exit market was also very active with 133 flotations far exceeding trade sales, he added.
The number of initial public offerings was a response to the high price to earnings (P/E) ratio on the local stock markets. The ChiNext, a Shenzhen stock exchange, has P/E ratios of more than 60 times. As a result, more than 40 companies are due to list on ChiNext.
However, VC firms said the market was going to adjust, although this might be because earnings were growing quickly rather than due to share price falls. One VC said a traditional food business it was investing in had its P/E ratio halve between the time the investor started its due diligence and investment due to the earnings doubling over the relatively short period of time.
Given the pace of growth across business sectors, VCs are not just concentrating on high technology companies for deals.
This report and picture was filed by Andrew Gaule with his H-I Network in Shanghai.