A Silicon Dragon tech economy began in 2002 with Chinese returnees—so-called sea turtles who came home to lay their eggs—who cloned Google, YouTube, and Amazon, grabbed Sand Hill Road money, and scored on NASDAQ and the NYSE. Today, homegrown Chinese entrepreneurs are snapping up venture capital from Chinese currency funds for even more clones—Beijing techie Wang Xing alone has cloned Facebook, Twitter, and a Chinese GroupOn.

The needle is gradually moving from “made in China” to “invented in China.” Micro-innovations tweaked for the local culture are cropping up more often. Sina’s Weibo, a hybrid Twitter-Facebook, layered in video and photo sharing before Twitter did. The long-awaited promise of disruptive technology from China is coming, too, symbolized by China’s climb to fourth place worldwide for new patent applications. GSR Ventures–funded LatticePower in Nanchang counts more than 150 patents for making low-cost efficient LED lightbulbs.

Venturing in China has transitioned from its roots along Sand Hill Road to hubs such as Tsinghua Science Park in Beijing. Over the past five years, Sequoia Capital and Kleiner Perkins have set up shops in Beijing and Shanghai with Mandarin-speaking partners to scout for deals in mobile communications, the Internet, health care, cleantech, e-commerce and social media.

Angel investors William Bao Bean and Baidu co-founder Eric Xu are the Ron Conways of Valley angel investor fame. Ex-Google China honcho Kai-Fu Lee has powered up Innovation Works to coach smart young Chinese coders and jump-start projects from serial entrepreneurs. The Zhongguancun district of Beijing, where Innovation Works is based, is home to 10,000 high-tech startups, 150 incubators, more than 1,000 research and development centers, three leading universities—Tsinghua, Beida, and Beihang—and China’s ten-year-old university and science center known as TusPark.

China’s sprawling Silicon Valleys are spreading from Beijing’s Haidian district and Shanghai’s Zhangjiang Science Park to the less-expensive hinterlands. Second-tier cities with business specializations such as automotive for Chongqing, software for Chengdu, outsourcing for Dalian, and digital media for Hangzhou are a reminder of how Boston, Austin, Raleigh, and Seattle developed as tech offshoots of the San Francisco Bay area’s software and semiconductor strongholds. China Internet leaders Tencent and Alibaba are spreading their wings to Japan, France, the United States, India, Vietnam, and elsewhere through acquisitions and multilingual web sites.

The backdrop is China’s booming economy, its world-leading mobile and Internet markets, government incentives to foster tech growth, and the rise of a shop-till-you-drop consumer class eager to travel, buy cosmetics, dress in brand-name fashions, diet, exercise, and buy the latest mobile gadgets.

China’s young entrepreneurs today are not as risk averse as the prior generation—not as prone to opt for a secure corporate job out of peer or family pressure. Grassroots entrepreneurship is at a higher level of sophistication and maturity than with the web 1.0 generation.

But China technopreneurs are still in those awkward years of adolescence. The next Jack Ma of Alibaba fame has yet to emerge. What are the gaps? Operational experience, imaginative thinking, and the financial smarts and finesse of, say, a Goldman Sachs hire. Typically, the startup executive has the polish and the skills but often can’t assemble an experienced C-suite team or middle management staff.

The fissures in the wall are there, for sure. Doing business in China also means dealing with corruption, fraud, lack of the rule of law, inflation, censorship of Web content, and China’s notorious counterfeiters, who have popularized a whole industry of cheap knockoff or shanzhai cell phones.

That’s a long list of ills, but the tides are shifting and swiftly. As China’s Silicon Dragon evolves as a startup frontier with multiple undercurrents, it could even one-up the original Silicon Valley and become a technology superpower. That may be only a decade or two from now.

We’ll be debating these trends at our Silicon Dragon ‘Chinov8!’ event, Oct. 6, at Rosewood Sand Hill. Our expert panelists include Brad Bao ofTencent, Bill Tai of Charles River Ventures, Tim Draper of DFJ, Richard Lim of GSR Ventures plus Marguerite Gong Hancock of the Stanford Program on Regions of Innovation and Entrepreneurship. We’ll be hearing more from our featured Chinese tech entrepreneurs Jeff Chen of Maxthon (China’s Internet Explorer plus) and Haidong Pan of Hudong (China’s Wikipedia plus), who are flying in from Beijing to speak at Silicon Dragon ‘Chinov8!’ during China’s National Day Holiday.