Govt to pro­mote ven­ture cap­i­tal

Premier Li Ke­qiang says that in­vest­ments should be driven by mar­ket de­mand

China Daily (USA) - - CHINA - By ZHANG YUE and HU YONGQI Con­tact the writ­ers at huy­ongqi@chi­nadaily.com.cn

Com­pre­hen­sive guide­lines will be is­sued by the State Coun­cil, China’s Cab­i­net, to en­sure the health­ier and more sus­tain­able de­vel­op­ment of ven­ture cap­i­tal.

The new guide­lines were ap­proved on Thurs­day at the State Coun­cil’s ex­ec­u­tive meet­ing. Premier Li Ke­qiang, who presided over the meet­ing, high­lighted the im­por­tance of ven­ture cap­i­tal de­vel­op­ment.

“En­cour­ag­ing ven­ture cap­i­tal de­vel­op­ment means a lot for the coun­try’s ef­forts in main­tain­ing sus­tain­able growth and cre­at­ing jobs,” Li said.

“Mean­while, China’s econ­omy still faces con­sid­er­able down­ward pres­sure, yet we no­tice that re­gions that per­form well in the new econ­omy have much less pres­sure in en­sur­ing em­ploy­ment than ar­eas that did poorly in de­vel­op­ing the newe­con­omy.”

Over the past decade, ven­ture cap­i­tal in China has recorded an­nual av­er­age growth of up to 20 per­cent.

The new guide­lines em­pha­size that the de­vel­op­ment of ven­ture cap­i­tal should pri­or­i­tize the newe­con­omy.

In­vestors should ap­ply a more pro­fes­sional ap­proach

Li Ke­qiang, premier

based on their own fea­tures, use credit wisely and be aware of their so­cial re­spon­si­bil­i­ties.

The guide­lines echo the “mass en­trepreneur­ship and in­no­va­tion” pro­gram un­veiled by the premier in 2014. The govern­ment has been rein­vig­o­rat­ing the econ­omy by en­cour­ag­ing more peo­ple to start their own busi­nesses and un­leash their in­no­va­tive po­ten­tial.

Fig­ures from the Na­tional De­vel­op­ment and Re­form Com­mis­sion show that 2.62 mil­lion en­ter­prises were reg­is­tered in the first half of 2016, up 28.6 per­cent from last year. By the end of 2015, ven­ture cap­i­tal had cre­ated about 2.17 mil­lion jobs.

“De­vel­op­ing ven­ture cap­i­tal will con­trib­ute to our coun­try’s in­no­va­tion-driven de­vel­op­ment strat­egy and boost pri­vate in­vest­ment,” Li said. “We need to en­cour­age pri­vate in­vestors and pro­tect their law­ful rights and en­thu­si­asm.”

Li said the de­vel­op­ment of ven­ture cap­i­tal should be guided by mar­ket de­mand, and a wider range of international prac­tices should be im­ple­mented.

Ac­cord­ing to the guide­lines, the coun­try will en­cour­age more di­ver­si­fied ven­ture cap­i­tal com­pa­nies, in­clud­ing an­gel in­vestors. Fi­nanc­ing chan­nels for ven­ture cap­i­tal in­vestors will be ex­panded, and tax poli­cies for the sec­tor will be bet­ter de­vel­oped.

“Ven­ture cap­i­tal can fi­nance small busi­ness star­tups that have promis­ing mar­kets. Pro­mot­ing the form can boost eco­nomic vi­tal­ity and help cre­ate more op­por­tu­ni­ties for em­ploy­ment,” said Huang Qun­hui, di­rec­tor of the In­sti­tute of In­dus­trial Eco­nomics at the Chi­nese Acad­emy of So­cial Sciences.

The State Coun­cil also an­nounced that China will ex­pe­dite ef­forts to make Bei­jing a na­tional sci­en­tific and tech­no­log­i­cal in­no­va­tion hub, so it can be a lead­ing ex­am­ple of the coun­try’s in­no­va­tion drive.

The fo­cus will be to “de­velop fun­da­men­tal re­search fron­tiers” and “cul­ti­vate global com­pet­i­tive­ness” in sec­tors in­clud­ing smart man­u­fac­tur­ing, bi­o­log­i­cal medicine, clean en­ergy and en­vi­ron­men­tal pro­tec­tion.

En­cour­ag­ing ven­ture cap­i­tal de­vel­op­ment means a lot for the coun­try’s ef­forts in main­tain­ing sus­tain­able growth and cre­at­ing jobs.”

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