"Venture capitalists are focusing on China partly because they are sitting on more money than they could possibly invest in American-based start-ups. Collectively, venture firms in the United States have on hand $64 billion, according to the research firm VentureOne, yet they are investing only about $5 billion a quarter."

"You can hear the difference between the two groups," Mr. Huang said. "The traveling V.C. whose interest is only recent sees the positive side of things a lot more than we do. They tend to underestimate some of the difficulties of doing business here. They look at Nasdaq and see 51job and decide they should invest."