For the past several years entrepreneurs with links to China have found a cool reception from most investors. The risks were perceived as too high and there was not enough understanding of doing business in and with China to get the level of comfort most investors need before jumping into a deal.
StartupJournal reports that this may be changing:
Early-stage investors are plowing money into China, and often posting permanent staff here, despite concerns about political instability, tight controls on capital and a dearth of local management talent. U.S. financiers say huge domestic demand for high-tech gadgets and sophisticated technical gear in China is hard to ignore, particularly when it spawns genuine local innovation in fields such as telecommunications and semiconductor design -- not just "me too" technologies riffing off Western products.This should be good news to two groups of entrepreneurs. First, there are a large number of Chinese studying business in the US who want to take advantage of their connections back home. Second, many entrepreneurs have built business models that take advantages of outsourcing manufacturing to low cost sources, particularly Chinese companies.
But all involved should still be cautious. There are political risks and very weak intellectual property rights. And if you think Kelo is scary, property rights in China really do not exist in any meaningful way.
