He said content, special technology, market-tracking services and geographic expansion are becoming more important to venture capitalists here and to the companies they target. While new technologies and a sound business model remain crucial, management has grown increasingly important as Wall Street analysts sift through revenue and profit reports. Investors may consider a solid management team more important than pure technology plays. Information gap Experts agree that the biggest challenge to foreign investors is gaining a better understanding of the Chinese market and improving communications with their Chinese partners. Few Wall Street analysts track Chinese technology companies, so there is less information about individual companies, their technologies and their true value.
Transparency is another challenge.
Some Western investors said more openness is needed on how Chinese laws and regulations affect projects, particularly in different regions of the country. Finally, China lacks the international management teams needed to run new technology businesses. Local entrepreneurs are important revenue generators, but they often lack the experience to run an international business. Consequently, foreign investors nearly always bring in their own management team to protect their investment. That often means that company founders lose control of their companies and earn far less.