Prime Highlight
- China rolled out a 20-year national venture capital guidance fundto channel long-term investment into strategic and emerging industries.
- The fund aims to support seed and early-stage firmsin sectors like AI, biomedicine, quantum technology, aerospace, and future energy, encouraging private investment alongside government backing.
Key Facts
- The initiative is a joint effort by the NDRC and the Ministry of Finance, starting with three regional funds in Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Greater Bay Area.
- At least 70% of the capitalwill be allocated to early-stage firms, with professional institutions managing fundraising and investments under a market-oriented approach.
Background
China on Friday rolled out a national venture capital guidance fund to push more patient capital into strategic and future industries, as the country sharpens its focus on innovation-led growth.
The fund is a joint initiative of the National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF). It begins with three regional funds in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area.
Officials said the fund will use central government capital to draw in local governments, state-owned firms, banks, and private investors. The aim is to boost funding for strategic emerging sectors and build what China calls “new quality productive forces.”
Bai Jingyu of the NDRC said innovation-driven firms need long-term backing, not quick returns. To meet this need, the fund will run for 20 years and allow longer periods for investment and exit. It will follow the rule of “invest early, invest small, invest long-term, and invest in hard technology.” At least 70% of the capital will flow into seed and early-stage firms.
The three regional funds have already reached early investment deals in areas such as integrated circuits, quantum technology, biomedicine, brain-computer interfaces, aerospace, artificial intelligence, and future energy.
Guo Fangming of the MOF said the fund will work like an “angel investor.” Taking on early risks, it will encourage more private money to enter the innovation space.
Although policy-led, the fund will run on market lines. Professional institutions will manage fundraising and investments, chosen through open competition. There will be no fixed rule forcing funds to reinvest in specific locations.
The structure includes a central fund company, regional funds, and sub-funds. Officials expect the system to support more than 600 sub-funds in the three regions.
To manage higher risks in early-stage projects, the fund will use online tracking and on-site checks, allowing faster warning and action when problems arise.
