Going Global, Part 21: VCs Head to China

That giant sucking sound you hear is $360 million in U.S. venture capital heading to China. Kleiner Perkins Caufield & Byers, the storied Silicon Valley venture capital firm behind Intuit, Google, and Amazon, announced today that is plans to open two offices in China, where it will invest in high-tech startup companies, the New York Times reports.

"The move... underscores the growing interest among venture capitalists in China's blossoming economy and entrepreneurial culture," the Times writes. "Kleiner Perkins, while far from the first venture firm to enter China, is a particularly high-profile example of the trend."

VCs are eager to invest overseas, the Times says, because they feel in some cases foreign companies will have an easier time going public on foreign exchanges. The paper speculates that the Hong Kong exchange could benefit from VCs like Kleiner Perkins setting up shop in Asia. (To read the rest of the article, click here.)

What do you think? Should venture capitalists be looking for deals overseas? And political and legal issues notwithstanding, do you expect that the Asian financial markets will catch up to the U.S. markets when it comes to things like initial public offerings of stock? If so, what effect will that growing competition have on the U.S. economy?

Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman