🔑 Billions with leverage: China launches a national venture guidance fund with CNY 100B as anchor capital, plus three regional funds of over CNY 50B each (≈ USD 7.14 billion). Goal: state money to leverage private capital for hard-tech.
🌱 Earlier, smaller, longer: Investments focus almost exclusively on seed and early-stage startups. Target valuations below CNY 500 million, ticket sizes under CNY 50 million. At least 70% goes into young companies.
⚙️ Hard tech only: Focus on chips, AI, quantum tech, biotech, aerospace, brain–computer interfaces and 6G. Consumer internet and “soft tech” are largely excluded.
⏳ 20 years of patience: The fund runs twice as long as typical VC vehicles. Ten years investing, ten years harvesting. No exit pressure, no quarterly thinking.
🧭 Market logic, not bureaucracy: The state sets the direction, professionals make the investments. Success isn’t judged by single wins or losses. The aim is to survive deep tech’s “valley of death” with broader exit options than just IPOs.
Background
China is restructuring its venture system: away from late-stage rounds and national champions, toward seed and early stage. The state acts as an anchor for long-term risk capital as private and dollar funds grow more cautious and hard tech becomes costlier, slower and politically sensitive.
The new system is meant to provide early funding, spread risk and accept long development cycles.
- For founders: more capital, earlier, for longer.
- For VCs: clearer policy guidance, but fewer quick-exit fantasies.
- For markets: not just fast unicorns, but technological endurance.
The China Survival Guide for Western Businesses
Entity setup, WeChat strategy, hiring your first local team. 12+ years on the ground in Shanghai.
