According to today’s paper version of the Shanghai Daily venture capital investments in mainland China are booming. The newspaper refers to a recent report by Dow Jones VentureOne and Ernst & Young. The total investment in the first 3 quarters of 2006 is almost as much as last year’s total of US$ 1.2 billion. In the 3rd quarter the year on year growth was close to 50%.

Most investments are early-stage investments (about 60%), but the article notes that these start-ups have already achieved a level of business maturity that surpasses their US venture-backed counterparts, according to a spokesman of Ernst & Young. 22% is already profitable, compared with only 7% in the US.

IT investments (excl. internet) add up to a little less than 2/3rd of all VC investments, and internet-related companies are about 1/3rd of the total. There were also a few investments in the energy sector. The average investment size also increased, to about US$ 5 million (median figure).