James at ChinaVentureNews reviews "Investing in China: The Emerging Venture Capital Industry" by Jonsson Yinya Li and has some concrete ploicy recommendations for fostering Venture Capital in China:

"According to China VC expert Jonsson, China needs to address these important policy recommendations:

� The Company and the Partnership Acts need to be amended to provide a more flexible and effective operating environment for the VC industry.
� Partnerships are the usual form of organization used in countries with mature VC industries. The structures available in China are much more rigid making it more difficult for investors and fund managers to divide profits and risk.
� Currently, China has no law on regulations regarding
limited partnerships.
� Some provisions in the present
Partnership Act even hinders the development of limited partnerships.
� There is a need to accelerate the enactment of an Investment Fund Act as well as a Venture Capital Investment Management Act.
� VC companies in China currently face major restrictions on their funding sources.
� China should learn from and apply overseas experience by introducing investment funds to provide a structure for venture capital organizations.
� Finally, there's a need to establish a multilevel securities market system to improve the exit mechanism for VC investment."