China’s new $6.5 billion state VC fund wants to make it rain for startups

China’s government will soon set up a state venture capital fund worth RMB 40 billion (US$6.5 billion) in order to invest in the country’s startups. China’s State Council yesterday confirmed the move on its website, reports Reuters, explaining that the “establishment of the state venture capital investment guidance fund, with the focus to support fledging startups in emerging industries, is a significant step for the combination of technology and the market, innovations and manufacturing.”

There’s no date for when the Chinese government’s new VC fund will launch. It covers tech startups in innovative areas, as well as young companies venturing into new fields in things like green energy and biotech. It’s unclear at this stage if any of the money could make its way to web-based startups.

The US$6.5 billion chest of cash is larger than the Innovation Network Corporation of Japan (INCJ), a public-private partnership with US$3 billion available for investments in Japanese startups.

In the first half of 2014, China saw 83 new venture capital funds set up, worth a total of US$6.76 billion, according to data from Zero2IPO Capital. In that same period, US$5.3 billion worth of VC investments were made into startup companies in China.

While the limelight goes to billion-dollar investments into consumer-oriented apps and services, a great deal of that funding goes into companies involved in much broader tech and science segments.

See: South Korea to invest $400M into startups making wearables, drones, and self-driving cars

(Source: Reuters)