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China’s investment in startup companies

There are indications that Chinese officials may provide incentives for start-up companies doing business in their country. This is certainly true in the tech industry.

Particular regions in China recently promoted venture-capital funding. In the past few years, the number of venture-capital rose dramatically in Hong Kong. As the South China Morning Star notes, this has necessitated American companies to have to adapt to this new climate.

Another business periodical also notes that venture capitalists in China are showing interest in startups. In Shanghai, they’ve already been demonstrating interest in startups from Australia and Korea.

As this article also notes, it is true that startups in China go under great scrutiny. However, this potentially opens the door for foreign startups in China since domestic companies often don’t pass such a screening.

The search for high tech investments in China

Chinese investors are particularly looking for high tech companies providing innovative products aimed at Chinese consumers. Chinese companies often do not provide these sorts of products. Chinese investors are especially looking for advancements in the field of artificial intelligence (AI).

It is important for American companies seeking opportunities within China to understand that there are risks. No company should pursue such opportunities without doing their homework. Mistakes can be costly. There remain concerns about requirements to share trade secret information with Chinese companies when doing business there. China also has a whole host of laws and customs that American companies must understand.

Yet the opportunities for doing business in China are great – particularly with tremendous increases in Chinese investment dollars. Entrepreneurs just need to keep in mind that mistakes can be costly. It’s important to receive advice and counsel from professionals who understand Chinese laws and customs.

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