“The influx of the overseas capital indeed leads to competition, and especially in Beijing and Shanghai, the investments for some programmes are overly high. However, this situation is prominent in the acquisition market, we haven’t seen this in strategic investment market,” says Wu Baochun, the associated president of IBM China and the partner in the board of China Investments Fund.

In October 2006, IBM teamed up with the Lehman Brothers, one of the first international investment banks to enter China, to form the China Investment Fund. The Fund was created to invest in a range of public and private Chinese companies. Both sides offered 90 million USD respectively for the startup funding of the joint venture. Altogether eight investment partners managed the fund and choose suitable programmes for investment. Differing from ordinary venture companies who favour start up enterprises, the China Investment Fund is oriented towards established enterprises. Each investment is usually under 18 million dollars, occupying no more than 20% of the share rights of the invested companies. Wu also stresses that the fund “will invest in all fields except real estate”.

The establishment of the China Investments Fund is the first time IBM has directly entered the venture field. Yesterday the IBM Global Service Centre located in Chengdu of Sichuan province was finally founded.   .