Note: a version of this article was originally published in Venture Beat with the title Chinese Investors Target Latin American Startups as US Investors Shy Away. This version has more background and information about Magma Partners.
China, a country with deep roots as an industrial powerhouse, is now determined to center its economy around technological development and innovation. With government support and outward investments on the rise, China is positioning itself to have a much greater role in the global technology market.
According to Yilong Du, Managing Partner at Latham & Watkins, there are many factors stimulating the growth of the technology sector in China. Firstly, economic growth is driving the Internet market and an explosion of Internet-based companies. In China, 731 million people have access to the Internet and 95.1% of these people access the Internet via mobile devices, according to the China Internet Network Information Center. A budding, Internet-savvy middle class, coupled with a strong supply of talent, is driving China’s technology sector and increasing the demand for innovative products and services.
Shenzhen Capital Group Co Ltd, a State-owned venture capital firm, is just one example of a firm increasing its investments abroad to bring new technology to China. Through investments in innovative companies overseas, the firm hopes to strengthen China’s technology and industrial structure, said Ni Zewang, chairman of the SCGC. Zewang also stated that by connecting more Chinese startups with overseas resources, they can help local companies mature faster. While SCGC’s investments overseas account for only 6% of its current total, it plans to increase the figure to 15% by 2020. Continue reading…