SAN JOSE, California – A panel of long-time Chinese investors offered ideas Thursday on how American VCs can get their share of the dim sum as China’s economy booms ahead.

No one these days seems to doubt the wisdom of investing in the East. “We’re clearly past the point where people were making their first field trip to the east,” said Philip Anderson, a professor at France’s INSEAD business school, which hosted the conference.

Today, success rides on doing things right, as suggested by the panelists:

·          “The biggest contributor to our revenue growth is that we got into China early enough,” said Hong Lu, the founder and chairman of UTStarCom, one of China’s biggest telecoms.

·          “Asian companies are more cost-conscious,” said Lip Bu Tan, the Chairman of Walden International. “They like to hire young people and build a strong team. It’s hard to keep them focused because if there’s a customer request, they just do it.”

·         “I’m very optimistic about China,” said Danny Lui, the founder of computer maker Lenovo, who now makes angel investments. “Initially, I wrote lots of checks, checks, checks, checks…. Take your time and do your due diligence.”

Mr. Tan underlined the need for background investigations and skepticism. “We’ve had individuals who said they were a Ph.D. from a school, but when we checked, [they] had never even enrolled. It’s much tougher to reference people in Asia. The Asian people are a lot more reserved about saying anything bad about a person.”

“In Shenzhen, there’s a street where you can buy any type of certificate,” noted Mr. Lui. “Don’t trust what you see.”

Financial irregularities seem to be a problem as well, the panel members advised. “Never trust your auditor as much as you would in the U.S.,” said Mr. Tan. “We had an auditor tell us a company was

profitable, but it was losing money. Do your own check and don’t trust their numbers. Make sure it’s a transparent audit process.”

A mercurial government can also be a problem, the panelists agreed. “We were very eager to grow the company and find who owns the pager frequencies,” said UTStarCom’s Mr. Lu. “We found one that had bought the rights from the government. But the government can change its position very frequently, and when they pulled out the usage rights, we had to delay the IPO by a year and a half.

“You have to anticipate something totally unexpected happening,” he added.