THE China Development Bank and the Tianjin Binhai New Area signed an agreement to set up a venture capital fund to boost high-technology start-ups in the fastest-growing economic zone in north China.
The Ministry of Science and Technology Website released yesterday 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.
Pi Qiansheng, a vice-ministerial official who heads the TBNA administration, said the government funded and operated venture capital would primarily perform as a fund of funds, an investment fund that has a strategy of holding a portfolio of other investment funds rather than investing in tangible projects.
Pi said that the fund of funds will choose outstanding domestic and overseas venture capital funds, including private equity funds, to invest. The selected venture capital funds will be asked to prioritize their investment portfolio in high-technology start-ups based in the TBNA. The funds' areas of business focus would be on 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 domestic or overseas stock exchanges," Pi said.
The TBNA, comprises major ports and tariff-free warehouse areas in Tianjin, has more than 6,300 companies, including more than 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 Shanghai, Beijing, Suzhou, Wuhan and Xi'an.