by Doug Millison for SiliconValleyWatcher.com

The man with the cure for China market fever is Lip-bu Tan, "one of the first U.S.-based VCs to begin investing in China," according to the San Jose Mercury News.

Tan, chairman of Walden International "was one of the early backers of Chinese semiconductor company SMIC, which recently became the fastest company ever to hit $1 billion in annual sales," writes Matt Marshall. More important, Tan "helped bring other VCs into that deal."

Marshall reports that Tan is leading a deal to invest $11 million "in a Chinese semiconductor-equipment company, bringing in a group that includes a few first-time Silicon Valley investors in China: Interwest Partners, Lightspeed and Bay Partners."

Other VCs who have partnered with Tan in China deals, according to Marshall, include:

• Robert Chaplinsky of Mohr Davidow Ventures



• David Britts of ComVentures



• New Enterprise Associates investing, with Tan, $15 million in Telegent Systems, "another fabless-chip company that enables TV broadcasting on mobile devices"

Marshall says Tan has become the go-to man because he speaks Mandarin and Cantonese and has well-placed Chinese connections.

Having lived in China for a year and a half and possessing fluency in Mandarin, I can say that it is the standard dialect, nationwide, necessary for interacting with Beijing-based government officials. Cantonese is the devilishly difficult (even harder to learn than Mandarin because it has a more complex system of tones) dialect spoken by clannish entrepreneurs in southeast China, Hong Kong, and throughout the Overseas Chinese diaspora.

Since Tan keeps a home in Shanghai, according to Marshall, I wonder if he might have some fluency in Shanghai dialect, too, which is also very difficult. (Mandarin, Cantonese, and Shanghai dialects are very different, mutually unintelligible, with wildly varying pronunciation and idioms - but all educated Chinese read essentially the same written language, with some local differences in diction.) Shanghai, colonized by the French, Germans, British, Americans, and Japanese in the first half of the 20th century, is often called the Manhattan of China, because of its cosmopolitan culture, and because of the entreprenurial gusto expressed by the native Shanghainese. (To get a flavor of the difference between Northern and Southern China, think Red State/Blue State, to put it in terms of the recent Presidential election.)

Marshall hints at what must be true, if Tan truly has the kind of clout necessary to put together successful deals of this size and scope: Tan's contacts include highly-placed officials in the Chinese Communist Party-controlled government who are the gatekeepers for investment and profit repatriation, and who provide protection against project-killing bureaucratic or legal action.

Marshall reports that Tan "has a penthouse in Shanghai," but "he wants to keep his base here, saying his wife and kids like it too much to leave." Tan sits "on the board of the San Francisco Opera; is a fan, with his sons, of the Giants, Raiders and Warriors; and is involved in a church group here."

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