China has launched a national venture capital fund and three regional funds to channel state-backed investment into domestic technology firms, as Beijing steps up efforts to boost innovation and support emerging industries.
China has officially launched a national venture capital fund along with three large regional funds, together worth billions of dollars, as part of a broader push to support domestic technology firms and improve the efficiency of state-backed investment.
According to Xinhua News Agency, the National Startup Investment Guidance Fund and three regional funds covering the Beijing–Tianjin–Hebei region, the Yangtze River Delta and the Greater Bay Area began operations on Friday.
National fund backed by sovereign bonds
The national fund is supported by 100 billion yuan from the Ministry of Finance, raised through the issuance of ultra-long special sovereign bonds, Finance Ministry official Guo Fangming said at a briefing on Friday.
Regional funds to exceed 50 billion yuan each
The three regional funds have been set up through equity stakes held by the national fund in limited partnerships and are each expected to eventually grow beyond 50 billion yuan, Huo Fupeng, chairman of the state fund, said at the same event.
Push for tech self-reliance amid tighter finances
China is stepping up efforts to achieve technological breakthroughs as competition with the US intensifies in areas such as semiconductors. At the same time, tighter fiscal conditions — including rising debt risks and weaker revenue growth — have forced the government to adopt a more disciplined approach to investment.
The rise of AI startup DeepSeek earlier this year has also underscored the role that private capital can play in driving innovation.
“Emerging and future industries are still struggling with limited investment and insufficient inputs of other innovation factors,” said Bai Jingyu, an official at the National Development and Reform Commission, at the briefing.
“Addressing these gaps through the development of patient capital is the very purpose and mission of the guidance fund,” he said, adding that the fund will operate on market-based principles, with investment decisions made by professional managers.
Focus on ‘little giants’ and startups
The NDRC first announced plans for the national fund in March, estimating that it could help mobilise up to 1 trillion yuan in investment from local governments and private capital.
The fund will run for 20 years, with the first 10 years devoted to investments and the remaining 10 to exits. The structure is designed to support long-term company growth and help cultivate so-called “little giants” — smaller firms aligned with China’s technology priorities — as well as unicorns across sectors, Bai said.
Seed-stage and startup firms will account for at least 70 percent of the national fund’s investments. The fund will focus on companies valued at no more than 500 million yuan, with individual investments capped at 50 million yuan.
Priority sectors
Strategic emerging and future industries will be prioritised. Bai said the three regional funds plan to invest in sectors including integrated circuits, quantum technology, biomedicine, brain–computer interfaces and aerospace.
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