context: Zheng Shanjie 郑栅洁 National Development and Reform Commission director announced a new national venture capital guidance fund is being prepared on 6 March 2025.
The announcement of the new national VC (venture capital) guidance fund signals a shift in government strategy from 'fixing weak links' to 'building strong foundations' in tech innovation, says Tian Lihui 田利辉 Nankai University Institute of Financial Development dean. The fund’s layered investment model can amplify social capital investment by 5–10 times, creating a larger funding pool for startups, he says.
It has sparked excitement in the PRC’s VC industry, with experts hailing it as a milestone initiative that will drive multiple positive effects.
If the parent fund contributes 30 percent of capital, it could leverage up to C¥4 tn (US$560 bn) in sub-funds, making it a dominant force in the PRC’s VC landscape, notes Fang Jianhua 方建华 Hefei Guoke Xinneng Equity Investment founding partner. This, he argues, is crucial for supporting new quality productive forces and strategic emerging industries.
Around the same time, Guiyang Municipal Government released new measures on government angel funds, with the VC circle impressed by it permitting them to incur losses of up to 50 percent of their actual paid-in capital over 15 years plus a five years exit period.
The annoucement of the fund is a landmark event demonstrating the government’s firm commitment to the long-term development of the VC sector, says Li Wei 李伟 Beijing Qihang Venture Capital Managing director. He emphasises that the fund will inject substantial liquidity into the market, revitalising the industry and opening a new chapter for the PRC’s VC ecosystem.
The fund will boost market confidence, especially as VC firms currently face financing and exit pressures, says Xu Junming 许峻铭 Xicheng Zhiyuan Private Equity general manager. He likens the fund to an aircraft carrier that will guide smaller firms toward collective strength. With its long-term investment horizon, it will complement existing short-term, financial-market-driven funds, creating a more balanced investment matrix.
Fang believes the rise of AI startups has ushered in a new era for VC, with global capital increasingly recognising early-stage and high-tech investments. Li adds that recent policy support has been unprecedented, reinforcing confidence in long-term, high-tech investments that translate major scientific advancements into real productivity.