Chinese startups reaped $1.2 billion in the second quarter, a 73.5 percent increase versus the year-earlier quarter and the second highest total ever, according to a new report.

 Venture capital tracker Zero2IPO Group reported that 143 Chinese firms disclosed investments, a 28 percent sequential increase over the first quarter though fewer than the fourth quarter of 2007, when 164 firms received $1.24 billion.

The survey contrasts with results in the United States, where second-quarter investment activity moved lower. The MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association reported $7.4 billion invested in 990 deals compared to $7.5 billion in 977 deals in the first quarter. A rival report using different methodology from Dow Jones VentureSource, however, found investment fell 12 percent to $6.64 billion in 602 deals.

The report of continued vibrancy in Chinese venture capital comes as the economic giant prepares for its biggest-ever global showcase as the host of the summer Olympics beginning August 8.

Though U.S. investment lagged, American VCs nearly doubled their investments in China, injecting $583 million in 47 second-quarter deals versus $296 million in 34 transactions in the first quarter, according to the MoneyTree report.

Forty new VC funds were established in China with $3 billion in fresh capital, a quarterly record, according to the study by Zero2IPO Research Center Q2 Survey and the China Venture Capital Report Q2  2008.

Among the largest of the new China-focused funds was a $500 million fund announced in April by Intel Capital.

The information technology sector accounted for the largest slice of the deals and invested capital for the quarter with 42.1 percent and 45.9 percent. IT was followed by traditional industry, services, undisclosed and biotechnology/healthcare.

Expansion-stage fundings attracted more than half of the capital, while early-stage and late-stage deals received 24.5 percent and 16.4 percent, respectively.

Foreign VCs dominated the big deals in China. They funded 12 of the quarter’s 13 deals worth more than $20 million and those deals accounted for almost half of the period’s total investment.

Unlike the United States, whose markets witnessed a shutdown of venture-backed initial public offerings, China saw 10 companies debut on the public markets.