This year's government work report emphasized the efficient utilization of the national venture capital guidance fund, vigorous development of venture and angel investment, and the leading role of government investment funds in acting as patient capital. The aim is to accelerate the growth of more startups into leading technology enterprises. Expanding exit channels for private equity and venture capital funds, and increasing the proportion of direct and equity financing, were also highlighted. Multiple delegates and committee members believe this sends a clear signal: by nurturing patient capital and improving the venture capital ecosystem, capital can better serve technological innovation and industrial upgrading. A comprehensive capital system, centered on "investing early, investing small, investing long-term, and investing in hard technology," is rapidly taking shape—from government investment funds to market-driven venture capital institutions, and from national-level venture capital "fund of funds" to the anticipated national merger fund. This system is unlocking broader development space for China's emerging and future industries.
Government investment funds are taking the lead as patient capital. Cutting-edge fields such as future energy, quantum technology, embodied AI, brain-computer interfaces, and commercial spaceflight are accelerating into new global industrial battlegrounds. Compared to traditional industries, these hard tech sectors often involve long R&D cycles, high technological uncertainty, and massive capital investment. The journey from laboratory to industrialization can take a decade or longer. Government investment funds are playing an increasingly vital role in cultivating future industries and supporting hard tech innovation.
"Future industries generally feature high uncertainty, substantial upfront investment, and long payback periods, requiring more long-term, stable capital support," said Yuan Guohua, a National People's Congress deputy and chairman of Shanghai State-owned Capital Investment Co., Ltd. Accordingly, Yuan proposed establishing an ultra-long-term future industry fund of funds with a lifespan of 15 to 20 years. By adopting a "fund of funds + sub-funds" model, it would attract private capital participation, forming a future industry investment system worth hundreds of billions of yuan, focusing on frontier areas like quantum technology, controlled nuclear fusion, and brain-computer interfaces.
In recent years, Shanghai State-owned Capital Investment has consistently increased its stakes in emerging and future industries. For instance, it has invested in tech firms such as Moore Threads, Biren Technology, and MiniMax. Yuan stated, "We have specifically established funds of funds targeting three leading industries—integrated circuits, biopharmaceuticals, and artificial intelligence—as well as a future industry fund of funds, positioning ourselves to invest early, small, long-term, and in hard tech. We screen sub-funds based on a lifespan of 15 or even 20 years to ensure they can make long-term investments. Our entire fund's investment period is also 15 years or more, ensuring alignment with the industry's lifecycle."
Simultaneously, Beijing E-Town is accelerating the development of a sci-tech innovation capital ecosystem. In recent years, E-Town Capital has used financial innovation as a driver, focusing on nurturing emerging industries and making early bets on future sectors like AI, synthetic biology, and aerospace technology, promoting the tiered development of dominant, emerging, and future industries. A relevant official from E-Town Capital mentioned that the company concentrates on the startup and growth-stage needs of hard tech firms, optimizing its fund investment layout to prioritize early-stage micro-enterprises with high technological content and significant growth potential. It has established a fund matrix comprising seed funds, sci-tech innovation funds, and talent funds, providing comprehensive coverage for early-stage projects in terms of talent, projects, and essential factors.
"Currently, E-Town Capital is deepening cooperation and synergy with regional funds under the National Venture Capital Guidance Fund, integrating multi-party capital and resource advantages to jointly expand the scale of early-stage investment in the hard tech sector," said a representative from E-Town Capital.
Expanding exit channels is crucial for passing the baton. For the venture capital industry, "fundraising, investing, managing, and exiting" form a complete chain, with the exit phase being particularly critical. In recent years, as IPO rhythms have fluctuated, venture capital institutions' demand for diversified exit channels has intensified. This year's government work report called for expanding exit channels for private equity and venture capital funds.
Cai Jianchun, a member of the National Committee of the Chinese People's Political Consultative Conference and general manager of the Shanghai Stock Exchange, stated, "We should further optimize diverse exit channels, such as M&A exits, and not think solely from an IPO perspective." On March 6, Zheng Shanjie, director of the National Development and Reform Commission, stated at a press conference on the economy during the fourth session of the 14th National People's Congress, "To strengthen support for innovation, last year we established the National Venture Capital Guidance Fund; this year, together with the Ministry of Finance, the People's Bank of China, and other departments, we will establish a national merger fund to further smooth venture capital exit channels and improve the turnover efficiency of venture capital. This is expected to guide and leverage various funds totaling over 1 trillion yuan."
"This series of measures directly addresses long-standing core pain points in the industry," said Zhang Yichen, a CPPCC National Committee member and chairman and CEO of CITIC Capital. "In mature markets, only about 20% to 30% of primary market investment exits are completed via IPOs, with the majority achieved through M&A." Zhang stated that mergers and acquisitions should become a key focus in China's capital market.
Yang Chengzhang, a CPPCC National Committee member and chief economist at Shenwan Hongyuan Securities Research Institute, also believes merger funds will play a significant role in the development of future industries. Yang noted that in complex industrial systems like smartphones, smart cars, and humanoid robots, many innovative companies will not grow into giants alone but will become key modules within the entire industrial chain, integrating with leading chain enterprises through M&A for mutual development. "A more ideal model is market-driven M&A, using mergers to supplement and strengthen the industrial chain," Yang said.
"In practice, we actively manage exit paths through methods like secondary share sales and participation in secondary fund transactions," said Mi Lei, founding partner of CAS Star. "We believe secondary funds and merger funds will mature gradually. As more institutions enter, the stability of fundraising, investment, management, and exit activities in the domestic capital market will improve."
Driven by both policy support and industrial transformation, venture capital is rapidly converging on new industrial tracks. In terms of investment direction, sectors like artificial intelligence, quantum technology, commercial spaceflight, brain-computer interfaces, and controlled nuclear fusion have become key areas for venture capital institutions.
Zhang Yichen mentioned that in the venture and growth investment stages, CITIC Capital primarily focuses on cutting-edge tech fields, including AI, semiconductors, biotechnology, new materials, and aerospace. Concurrently, a group of venture capital firms specializing in hard tech are accelerating their布局 in emerging and future industries.
CAS Star has long concentrated on "from 0 to 1" foundational technological innovation, actively investing in hard tech sectors represented by AI, embodied AI, photonics, quantum technology, controlled nuclear fusion, commercial spaceflight, brain-computer interfaces, synthetic biology, and atomic manufacturing. "These directions are not only strategic priorities in national planning but also choices based on our 'ESK' value investment philosophy," Mi Lei stated. "We believe that economic value and social value originate from significant foundational knowledge increments; knowledge value is the fundamental driver of economic and social growth. This investment philosophy is highly suited to China's current development stage."
At the local level, state-owned platforms like Shanghai State-owned Capital Investment and E-Town Capital are continuously increasing their investments in future industries. Through the coordinated operation of government and market-driven funds, they provide long-term capital support for innovative enterprises.
Yuan Guohua explained that in the future industry domain, Shanghai State-owned Capital Investment has made前瞻布局 in areas like controlled nuclear fusion, quantum chips, silicon photonics, and brain-computer interfaces, consistently aiding industrial capability upgrades and key technological breakthroughs, and accelerating the transformation of scientific achievements from the "first mile" to the "last mile."
"This year's government work report, from the perspective of national top-level design, affirmed the critical role of the venture capital industry in cultivating new quality productive forces, providing policy assurance for long-term capital injection," Mi Lei said. "We look forward to the swift implementation of relevant measures. This year will be pivotal for the venture capital industry's service to technological innovation, and a healthier, more sustainable industry ecosystem is taking shape."
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