China has launched three state-backed venture capital funds with a combined size exceeding 150 billion yuan ($21 billion, amounting to $7.14 billion each), marking a decisive shift in how Beijing allocates capital across its technology sector. Each fund will exceed 50 billion yuan, according to state broadcaster CCTV, with capital commitments now finalized. Unlike earlier waves of Chinese technology investment, which prioritized consumer-facing internet platforms, the new funds are designed to channel money into what policymakers describe as “hard technology” — the physical, tangible innovations focused on hardware. Target areas include semiconductors, quantum computing, aerospace systems, biomedicine, brain–computer interfaces and advanced manufacturing.
For more than a decade, China’s venture capital ecosystem was shaped by the rise of companies such as Alibaba and Tencent, which built vast businesses around e-commerce, digital payments, gaming and social media. That period saw capital concentrate on “soft technology,” where scale, network effects and rapid monetization defined success. The launch of these three funds signals a clean departure from that model. Rather than chasing consumer adoption curves, the state is now directing capital toward the “physical layer” of the economy — the chips, materials, systems and scientific breakthroughs that underpin industrial power.
The new venture funds fit within the priorities outlined in China’s 14th Five-Year Plan (2021–2025), which calls for accelerated breakthroughs in specific tech and reduced reliance on foreign supply chains. That plan elevated semiconductors, quantum science, aerospace and biotechnology to national priority status, treating them as foundational to long-term growth and security. By structuring the funds as venture capital vehicles rather than industrial subsidy programs, policymakers appear to be attempting to close a long-standing gap between laboratory research and commercial deployment.
From the looks of it, these funds differ from China’s well-known National Integrated Circuit Industry Investment Fund — commonly called the “Big Fund.”
While the Big Fund has focused on capital-intensive manufacturing projects such as semiconductor fabrication plants, the new vehicles are designed to operate at an earlier stage. According to media reports, oficials said the funds will prioritize startups valued below 500 million yuan, with individual investments capped at 50 million yuan. This structure favors engineers, researchers and inventors rather than industrial conglomerates, giving the funds flexibility to back unproven ideas and emerging technical talent. In effect, Beijing is attempting to replicate elements of early-stage venture ecosystems seen in Silicon Valley, while retaining strategic oversight.
Semiconductors remain a central focus, particularly as China accelerates adoption of the open-source RISC-V chip architecture. RISC-V allows developers to design processors without relying on proprietary Western instruction sets, offering a pathway around export controls and licensing restrictions. Chinese firms and research institutions have increasingly embraced RISC-V for applications ranging from embedded systems to AI accelerators, and the new funds are expected to support startups building tools, cores and system-on-chip designs around the architecture. China already occupies a leading position in quantum communication, most notably through the Micius satellite, which demonstrated space-based quantum key distribution. According to reports, the funds will support companies working on quantum processors, control systems and software platforms, with the explicit goal of moving quantum computation from research labs into practical use.
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