A survey of private equity and venture capital investors in the Asia-Pacific region found that China has overtaken South Korea as the most favoured market for investment in the region. Indeed, China-bound investment accounted for 40 per cent of total overseas investment by Korean companies in the first quarter of this year.
The survey, conducted by PricewaterhouseCoopers, revealed that their biggest concerns about investing in China were ensuring an exit strategy to reap rewards, transparency and reliability of information, and corporate governance.
Investors saw a positive trend in the market after regulations covering foreign participation in venture capital funds were revised in March. However, the survey also found that these revised regulations failed to address high taxes and foreign exchange controls faced by foreign investors and this was causing potential entrants to be cautious about commitment.
The survey was undertaken before the onset of Sars, but PwC said that the results would be largely unaffected by the epidemic.