China on Monday launched operations of a national venture capital guidance fund with a target size of up to 1 trillion yuan (about $142.7 billion), marking a major policy move to channel long-term capital into early-stage and hard-technology and to scale advanced manufacturing and automation, where artificial intelligence and robotics are increasingly reshaping production models and global supply chains.
The fund, jointly established by the National Development and Reform Commission (NDRC) and the Ministry of Finance, will begin with 100 billion yuan ($14.3 billion) in government capital. It is designed to mobilize additional social and private capital through regional funds and sub-funds, eventually reaching its full targeted scale.
Structured as a three-tier system—comprising a guiding fund company, regional funds, and sub-funds—the initiative is already taking shape. Authorities have accelerated the launch of three major regional funds covering the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. All three have completed registration, signed investment agreements, and established an initial portfolio of 49 sub-funds and 27 investment projects.
According to Reuters, the fund will focus on strategically important and technology-intensive sectors, including integrated circuits, quantum technology, biomedicine, brain-computer interfaces, and aerospace, said Bai Jingyu, director of the NDRC’s Department of Innovation and High-Tech Development. The emphasis reflects China’s push to strengthen capabilities in hard technology and original innovation.
Bai said the fund will prioritize seed-stage, startup, and early-to-mid-stage companies, supporting disruptive technological breakthroughs while fostering what he described as a “two-way commitment” between capital and innovation. Recognizing that the growth of high-tech enterprises is a long-term process, the fund has been designed with a 20-year lifespan, including a 10-year investment period and a 10-year exit period, aimed at nurturing future “little giants” and unicorns across industries.
The fund will function as an angel investor, addressing market financing gaps at the earliest stages of innovation and sharing entrepreneurship risks through market-oriented mechanisms, said Guo Fangming, director of the Ministry of Finance’s Department of Economic Construction.
Guo said the ministry will perform its role as a state investor by focusing on policy effectiveness and regulatory compliance, rather than short-term profit and loss from individual projects or annual returns. He highlighted three defining features of the fund: targeting the front end of the innovation chain to close early-stage financing gaps; creating a relay mechanism based on patient capital to support projects through successive growth stages; and cultivating a sustainable innovation ecosystem by guiding social capital toward long-term participation in technological development.
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