The China Development Bank (CDB) and the Tianjin Binhai New Area
(TBNA) signed an agreement to set up a venture capital fund to
boost high-technologies start-ups in the fastest-growing economic
zone in north China.
The Ministry of Science and Technology (MOST) website,
www.most.gov.cn, released on Monday the joint efforts to kick off
the first government-backed venture capital worth two billion yuan
(US$270 million) with equal contributions from the CDB and the
TBNA.
The government venture capital corporation is organized within
the prevailing corporate framework of Western countries, with a
stakeholders' meeting, a board of directors and a supervisors
committee, the website said. It also has an investment decision
committee and a risk management committee which are expected to try
to reach sound investment decisions and control business risks.
Pi Qiansheng, a vice-ministerial official who heads the TBNA
administration, said the government-funded and operated venture
capital would primarily perform as fund of funds, an investment
fund that uses an investment strategy of holding a portfolio of
other investment funds rather than investing tangible projects.
Pi said that the fund of funds will choose both domestic and
overseas outstanding venture capital funds, including private
equity funds, to invest. Those selected venture capital funds in
partnership will be asked to prioritize their investment portfolio
in high-technologies start-ups based in the TBNA. The preferred
business areas would be electronics, bio-engineering, new
materials, new energy, environmental protection and automated
manufacturing.
Pi said the venture capital corporation has a full strategy,
including entry and exit plans, for future investment, the website
said.
"Our ultimate goal is to push the most competitive start-ups in
the area to get a public listing either in home or overseas stock
exchanges," Pi said.
The TBNA, consisting of the major ports and tariff-free
warehouse areas in Tianjin, has more than 6,300 companies,
including over 70 joint ventures with the world's top 500
companies.
The CDB, a policy bank founded by the central government in
1994, is now active in providing venture capital funds in the most
rapid growing cities in China. It provides funds for other venture
capitals which are interested in investing in rising industries in
Beijing, Shanghai, Suzhou, Wuhan and Xi'an.
The Chinese government encourages companies, both state-owned
and private-owned, to become the primary forces of innovation. The
government dishes out more and more funds of funds and seed funds,
which are provided to help a business develop an idea, create the
first product, and market the product for the first time.
The MOST is now organizing a nationwide survey on innovation
capabilities and competitiveness of start-up businesses. The
survey, according to MOST officials, is expected to help understand
more precisely how much those fund-thirsty start-ups need.
(Xinhua News Agency December 24, 2007)
