China is launching a 1 trillion yuan ($138 billion) government-backed fund to support its rapidly advancing technology sector.
The state venture capital guidance fund is designed to fuel innovation in cutting-edge industries such as artificial intelligence (AI), quantum computing, hydrogen energy storage, and semiconductors. The National Venture Capital Guidance Fund will aim to attract nearly 1 trillion yuan ($138 billion) in investment over the next 20 years, with support from both local governments and private sector partners.
The announcement comes amidst growing global competition, particularly from the United States, which has imposed a series of restrictions on Chinese tech firms. As part of the government’s broader strategy to ensure technological self-reliance, the fund will focus on high-risk, long-term projects that promise to drive significant breakthroughs in sectors critical to China’s future economic growth.
Zheng Shanjie, head of China’s National Development and Reform Commission (NDRC), outlined the ambitious goals for the initiative during a press conference held on Thursday. He explained that the fund will prioritize emerging technologies such as AI, quantum technology, and renewable energy, with a particular emphasis on nurturing startup companies and supporting early-stage innovation.
“Scenes once only seen in science fiction are now becoming reality. We are steadily moving toward the global frontiers of technology and innovation,” Zheng said. “This proves that the suppression and blockade attempt by certain forces only serve to accelerate our drive for independent innovation,” he added
Focus on cutting-edge fields
The national venture capital guidance fund, which will be managed through a public-private partnership, will ficus on cutting-edge fields such as AI, quantum technology, hydrogen energy, semiconductors, and renewable energy.
China has already made significant strides in these areas, with domestic companies developing competitive AI models and quantum communication systems. One of the most notable developments in recent months was the introduction of DeepSeek’s R1 large language model, which rivals global players like OpenAI’s GPT-4 and Meta’s Llama, yet at a significantly lower cost.
Despite ongoing efforts by the U.S. to restrict access to advanced AI chips for Chinese companies, DeepSeek’s breakthrough in developing a competitive AI model has highlighted China’s growing self-sufficiency in the tech sector. According to industry experts, this achievement demonstrates that Chinese firms are increasingly capable of overcoming technological barriers and pushing the boundaries of innovation.
China expanding financial support for tech firms
Alongside the venture capital fund, China is also expanding its financial support for technology companies through new initiatives aimed at facilitating the growth of domestic firms. At a briefing earlier this week, Pan Gongsheng, Governor of the People’s Bank of China, revealed that the country would create a new bond platform designed to help tech companies raise funds for innovation, project financing, and acquisitions. Additionally, China will significantly increase the funding available through its tech industry re-lending program, boosting the total capital from 500 billion yuan to 1 trillion yuan ($138 billion).
These initiatives reflect China’s commitment to fostering an environment that supports emerging industries such as bio-manufacturing, embodied AI, and 6G technology, as outlined in the government’s annual work report.
Road ahead for China’s technological ambitions
Chinese Premier Li Keqiang, delivering his annual government work report, also underscored the importance of supporting “emerging industries and industries of the future.” He highlighted the creation of mechanisms to increase funding for technological sectors like quantum technology and biomanufacturing, reinforcing China’s focus on building a modernized industrial system.
The national venture capital guidance fund, which will be managed through a public-private partnership, will be one of the central tools to drive this transformation. The long-term nature of the fund—spanning two decades—sets it apart from traditional venture funds and positions it as a key driver of technological innovation.
The fund will focus on areas such as quantum computing, AI, semiconductors, and renewable energy, among others, using a market-driven approach to support the growth of small and medium-sized enterprises, providing them with the resources they need to create disruptive innovations and technological breakthroughs, Zheng explained.
With a clear focus on high-tech industries and innovative growth, China’s new fund is poised to be a transformative force in its technological landscape. Despite external challenges, the government’s investment in these emerging fields underscores the nation’s determination to lead in the industries of tomorrow and ensure its position at the forefront of the global tech race.