(Yicai Global) Dec. 22 -- The average rate of return on Chinese yuan-denominated funds was greater than that of US dollar-denominated funds in the first nine months in China for the first time in the past ten years, online news outlet The Paper reported today, citing a recent report.

This may be an important crossover point, and yuan funds could play a more important role in China in the future, said Ni Zhengdong, founder of Beijing-based Zero2IPO Holdings which offers data, marketing, training and securities services for investment banks.

The yields on yuan funds have been climbing in recent years, while that of US dollar funds have been sliding, Ni said in a report released yesterday at the 22nd China Venture Capital & Private Equity Annual Forum.

The amount invested in China's US dollar funds plunged 67.3 percent this year from a year ago, the most in over 20 years, Ni said. Some CNY130 billion (USD18.6 billion) worth of US dollar funds were bought up in the first three-quarters, compared with CNY590 billion of yuan funds. The specific rates of return were not given.

Although China’s fundraising scale swelled 11 percent year on year due to the establishment of many state-owned funds, the frequency of investment sank 9.4 percent and the investment amount plunged 34 percent. State-owned funds are the most important source of equity investment in the country with 94 percent of funds larger than CNY10 billion (USD1.4 billion) being state-run.

However, the US’ fundraising scale was still 10 times that of China in the nine months ended Sept. 30 at USD409.7 billion. There were at least 20,000-times more investments and the investment amount came to USD1 trillion.

This indicates that there is still huge room for the development of China’s venture capital and private equity sectors, Ni said.

Editor: Kim Taylor