VC funding in Chinese IT companies falls

Venture capital funding in Chinese information technology companies was $992 million in 2007, down 9 percent from 2006, according to data from Dow Jones VentureSource.

The slowdown in venture funding for technology companies is striking given that funding in China hit its highest level in six years with $2.49 billion invested in 241 deals. That's a 5 percent gain from 2006.

Among the technology companies, Internet data services garnered the most cash. Overall, 110 IT companies in China received funding. Of that sum, 55 deals were for Internet information services companies, down from 86 in 2006.

So where's the money going? In a statement, Dow Jones VentureSource said retail and business services were hot categories. The China VC market is young so the deal sizes are smaller, but the slowdown in technology is worth noting.