NEW YORK -- The innovative spirit of Silicon Valley is still unique, but China's high-tech value creation is closing rapidly, and China has a huge market for the new economy, said Kai-Fu Lee, Chairman and CEO of Innovation Works.

Lee is one of China's most successful venture capitalists and influential micro-bloggers. Prior to starting Innovation Works, Lee was the president of Google China.

During a discussion at the China Institute in America, Lee pointed out that the traditional economy of China such as steel, coal etc. is slowing down, while the new economy including mobile and social networking is growing fast.

The Internet is the new engine for the Chinese economy, and it will transform every aspect of the economy, he said, adding that China has a huge market for the new economy.

China is already the world's largest mobile Internet market, with 900 million mobile users and 300 million mobile payment accounts.

According to Lee, China has the largest urban migration in human history. China has 54 cities with a population of over two million, while in the United States, the number is only four.

China has three times larger urban population than in the United States and the gap is increasing. Every year, more than 12 million people relocate to the city.

Lee said Internet companies expanded rapidly in China. "Basically if you are living in Beijing or Shanghai, you don't need to leave the house and everything can be delivered to your house," he said.

He also pointed out that the Chinese government is vigorous and effective. New policies brought new opportunities. He believed that Beijing is an entrepreneurial city, similar to the US Silicon Valley.

Founded in September 2009, Innovation Works is a leading early-stage investment company targeting Chinese high-tech companies and mentoring the next-generation of Chinese entrepreneurs.