The Internet has been seeing the next wave of growth. As pure conceptive Internet companies fade away, promising business models have begun to surface. Examples of these models include the "click plus brick" model which leverages the Internet as a new channel for traditional industries, the user-generated-contents model and the "Software as a Service" ('SaaS') model. In our view, there are still opportunities in this space even though the Internet and software have long been the focus of venture capital investment.
Wireless
With over 440 million mobile phone subscribers, the wireless industry in China promises continued growth. Innovative applications for mobile commerce, mobile media and mobile entertainment are seeing great business opportunities.
Education & Training
China historically has had a strong culture of education and the expenditure on education accounts for a significant percentage of a typical household's total expenditure. The education market in China is growing primarily due to favorable demographic trends, rapid economic growth and the increasing importance of education for career development. With millions of graduates coming to the labor market each year and with people in the existing workforce seeking career advancement, there is a huge demand for vocational education and training. In addition, the traditional degree education programs are also undergoing profound transformations as they become more market-oriented.
Financial Services
Financial services are at the core of a modern economy and China is at an early stage of opening up its financial services industry. With the market-oriented reform and further liberalization of the financial services industry, innovative business models are emerging either targeting at individual consumers or providing value-added services to large financial institutions.
Business Process Outsourcing ("BPO")
China is going to replace India as the largest offshore outsourcing center in a few years, with more graduates from various tertiary education institutes and relatively low labor costs. Among all kinds of Business Process Outsourcing ("BPO") services, HR outsourcing, data processing, procurement outsourcing, supply-chain outsourcing, etc, all stand a good chance to grow as China's fast growing economy continues to develop.
Healthcare
According to MOH statistics, there were 298,997 healthcare institutions, 18,703 hospitals and 2.3 billion hospital visits during 2005 in China. The market will continue to be robust with such a large population base and a predictable aging process. We believe there are ample opportunities in the healthcare sector.
Other Consumer-related High-growth Sectors
China's long-term economic growth will be driven by the consumption of its population. In general, we are interested in sectors which will benefit from this increase in consumption.