According to a report from Library House, China saw $2.8 billion of venture capital investment in 2006 - compared with the UK's figure of just under $2.8 billion.
Furthermore, the UK, which saw 27 per cent growth, will soon be overtaken by India should its 2006 growth rate of 90 per cent continue next year, the compilers of the study predict.
The study said: "The rise of China and India poses a growing challenge. Although the UK attracts over twice the amount of venture capital per capita than the rest of Europe, it attracts approximately a third of the amount of the US.
It added: "In the face of rapid growth in Asia and the continuing dominance of the US, further steps are needed to maintain the UK's place near the top of the global venture capital league."
The US remains the territory with the largest share of venture capital investment, garnering some $28 billion over the period.