China has launched three state-backed venture capital funds aimed at enhancing innovation in hard technology and strategic emerging industries, with each fund exceeding 50 billion yuan.
China is making significant strides in the realm of hard technology. According to state broadcaster CCTV, the country officially unveiled three venture capital funds on Friday, designed to invest in various “hard technology” sectors.
The funds, each with a capital contribution exceeding 50 billion yuan (approximately $7.14 billion), were jointly initiated by the National Development and Reform Commission (NDRC) and the Ministry of Finance. Three regional sub-funds have been established in key areas: the Beijing–Tianjin–Hebei region, the Yangtze River Delta, and the Guangdong–Hong Kong–Macao Greater Bay Area.
Bai Jingyu, an official from the NDRC, stated that the initiative aims to leverage central government capital to attract investments from local governments, state-owned enterprises, financial institutions, and private investors. During a press conference, Bai emphasized that the funds will enhance support for strategic emerging industries and expedite the development of new productive forces.
The term “hard technology” encompasses sectors that are capital-intensive, research-heavy, and strategically vital, including semiconductors, advanced manufacturing, artificial intelligence, new materials, biotechnology, aerospace, and high-end equipment.
Unlike consumer internet or platform-based businesses, these sectors often necessitate longer investment horizons and sustained policy support before yielding commercial returns. By establishing large, state-backed venture capital funds, China aims to address the funding challenges faced by early-stage and growth-stage hard-tech firms.
According to reports from Reuters, the funds will primarily target early-stage startups valued at less than 500 million yuan, with no single investment exceeding 50 million yuan.
In recent years, Chinese policymakers have underscored the importance of “technological self-reliance,” particularly in critical areas such as semiconductor manufacturing and industrial software. Substantial venture capital backing can play a pivotal role in supporting startups through lengthy research and development cycles, facilitating production scaling, and connecting them with industrial partners.
The funds are expected to focus on companies engaged in integrated circuits, quantum technology, biomedicine, brain-computer interfaces, aerospace, and other essential hard technologies.
The substantial scale of these funds, each reportedly surpassing 50 billion yuan, reflects a growing confidence in the efficacy of venture investment as a policy instrument. Large fund sizes may enable diversified portfolios across multiple sub-sectors while allowing for significant investments in promising companies. Additionally, they may attract private capital by mitigating perceived risks and signaling official support for targeted industries.
However, experts caution that the success of these funds will hinge on professional management, clear investment criteria, and market-oriented decision-making. Merely allocating capital will not suffice; achieving successful outcomes will require robust governance and the ability to identify commercially viable technologies.
The launch of these three venture capital funds underscores China’s commitment to accelerating advancements in hard technology. As global competition in advanced industries intensifies, such initiatives are poised to play an increasingly crucial role in shaping the country’s innovation landscape and long-term economic growth.
Ultimately, the effectiveness of this strategy will depend on its execution, governance, and responsiveness to market dynamics. Nevertheless, this initiative signifies an effort to cultivate an ecosystem where high-risk, high-impact innovation can thrive. Over time, sustained support for hard technology could bolster industrial capabilities, enhance supply-chain security, and foster new engines of economic growth. More broadly, it illustrates how targeted financial mechanisms are increasingly utilized as tools to guide national development and secure a competitive edge in emerging technologies.
According to Reuters, the establishment of these funds marks a pivotal moment in China’s strategy to enhance its technological capabilities.