**China Market Entry/Expansion Projects for US Tech Firms

**China Investment Projects with Partner US Private Equity & Venture Capital Firms


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Key China General & Financial News:


Latest:

China is now the World's 2nd biggest Automotive market.

Internet User pool is at 137 MM, YE06;
YBY Growth of 23.4% - but there's a yawning disparity between the urban and rural areas, with Internet use in cities 6.5 times that in the countryside.

17 MM Cell Phone Users surf the web with the phone, 12.4 percent of the Internet population.

Yoqoo, China's answer to Yourtube, has picked up USD $12.5 MM VC Funding.

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China have 236,000 Millionaires in 2003 with an accumulated wealth of USD $969 Billions.

After 3 Round of Private Equity Investments of USD $80 MM, Wuxi Suntech Solar went IPO in the New York Stock Exchange(Nov. 2005), where the share price jumped 41% on the first day of trading; joining other Chinese firms such as search company Baidu, advertising company Focus Media Holding, and wireless company China Techfaith Wireless Communication Technology. The IPO raised $396 million, with about $300 million going to the company. The deal makes Suntech Power the top tech IPO so far this year. Market Cap. in Jan. 06, went as high as USD $6.3 Billions, raising the Chairman/CEO, Dr. Shi Zhengrong, who received his Doctorate at the University of New South Wales, Sydney, Australia and studied with Prof. Martin Green; the Richest Man in China on Forbes China 100 List.

The Suntech IPO debuted the same day the California Public Utilities Commission unveiled its California Solar Initiative, which will be the largest solar incentive program in the United States, if approved.
It includes $2.8 billion in customer incentives for solar projects on existing buildings and sets the price for solar energy at equivalent to retail electricity prices—which waver depending on the time of use—instead of at lower wholesale prices.

As fossil fuel prices remain high, solar energy has been especially hot this year. The brokerage CLSA Asia-Pacific Markets said solar power was an $8-billion industry in 2004 and projects the industry will generate $12 billion in revenue in 2005 and more than $36 billion in 2010.
(VCNO is working on a number of Top 10 Solar Power Investments in China and welcome co-investors).


Citigroup's Syndicate invested USD $3 Billions and have acquired 85% of the GuangDong Development Bank in Jan. 2006. The Commonweath Bank of Australia has recently acquired stakes at the Hangzhou Commercial Bank and the Jinan City Commercial Bank(VCNO is working on a number of Top 30 City Commerical Bank Investments in China and welcome co-investors).

With Carlyle Group's (Oct. 2005) acquisition of USD $375 million for 85% of Xugong Group Construction Machinery Co (XCMC), China's Largest Construction Machinery Manufacturer, the Private Equity market in China is now truly buoyant(Carlyle's Chairman, Lou Gertsner has just visited Beijing in late Oct. 2005, for further large investments in China)(VCNO is working on a number of Top 8 Machinery Investments in China, remain very interested in this sector, as well as Special Aluminium and Iron, and welcome co-investors).

Warburg Pincus have acquired the Harbin Pharmaceutical Co. (VCNO is interested in China Pharmaceutical Firms and Specialized Hospitals).


China is now the world's fourth largest trading economy - 'Proven Return on Investment (Average 14%, IMF), Stable Environment, Excellent Infrstructure and Pro-Business Government', all had played a key catalyst to this success. US Investment Groups such as the Carlyle Group, Warburg Pincus, Draper Fisher Jurvetson and Sequoia have been investing heavily in China. Even the Stanford Management Company have now opened an office in Shanghai, and Buyout Firm KKR, in Hong Kong.

Golden Sachs latest estimates (Jun. 2005) projects that China's GDP will surpass that of Japan by 2012. Liang Hong, Goldman Sachs's economist, said that China is still in the initial stage of a new growth cycle. China's economy will maintain a speedy growth, "the three wagons" hauling the economic growth: 'consumption, investment and export' will continue fast running.

China is also the world's biggest mobile phone marketand the World's #1 PDA market. By May 2005, the number of phone subscribers in China reached a record of 692 million. The number of mobile phone subscribers rose 23.724 million in the first five months, making the cell phone users 358 millions. The number of fixed-line subscribers rose 21.05 million over the end of last year to 333 millions.

On the Broadband front, the mainland will have 34 million subscribers by YE05, but only a small 11.2% internet and a 28% cable market penetration; compared with 39 million in the US. By YE07, the mainland will have 57 million compared with 54 million for the US and the lead will only grow wider.

China is now the 2nd biggest Oil Importer in the world. With the formation of the China Greatwall Petroleum Holdings; China's #4 Petroleum Firm and a private one, China's Big 4 Oil Firms are continuing the massive effort in Energy Resources investments and acquisitions.

China is now the world's largest market for Cellphones (and considered by Nokia, Motorola and BenQ as their single most important market in this category) and color television sets, and the second largest for PCs after the United States. Some US technology stocks now trade as much on how the companies' sales are faring in China as in the United States.

Rick Wagoner, Chairman & CEO, General Motor said '...then there’s China, where annual economic growth has averaged 7 to 8 percent in recent years, with no letup in sight. Despite the relatively small size of its economy, China is now contributing more to global growth than Japan and Germany combined. The impact has been tremendous—Chinese auto sales have grown at an unbelievable 40- percent per-annum rate over the past couple of years. In fact, China has already pass Germany in 2005 to become the world’s third-largest auto market, and is on track to become the second-largest market, surpassing Japan'.

In Telecommunications, the Telcos are fast establishing CountryWide WIMAX/WIFI 802.11 HotSpots in airports, railway stations, shopping malls and cafes in East Coast cities.