China overtook the UK as the world's second-biggest destination for venture capital investments last year, in spite of a 27 per cent rise in British early-stage company funding to about £1.4bn, a survey revealed yesterday.

Library House, the Cambridge-based entrepreneurship research centre, said India was also due to overtake the UK by 2009 if Indian venture capital investments continued to grow at the 90 per cent rate seen in 2006.