| ID | 193214 |
| Title Proper | Promise and Pitfalls of Government Guidance Funds in China |
| Language | ENG |
| Author | Jia, Nan ; Ang, Yuen Yuen ; Yifan Wei ; Wei, Yifan |
| Summary / Abstract (Note) | In 2005, the Chinese government deployed a new financial instrument to accelerate technological catch-up: government guidance funds (GGFs). These are funds established by central and local governments partnering with private venture capital to invest in state-selected priority sectors. GGFs promise to significantly broaden capital access for high-tech ventures that normally struggle to secure funding. The aggregate numbers are impressive: by 2021, there were more than 1,800 GGFs, with an estimated target capital size of US$1.52 trillion. In practice, however, there are notable gaps between policy ambition and outcomes. Our analysis finds that realized capital fell significantly short of targets, particularly in non-coastal regions, and only 26 per cent of GGFs had met their target capital size by 2021. Several factors account for this policy implementation gap: the lack of quality private-sector partners and ventures, leadership turnover and the inherent difficulties in evaluating the performance of GGFs. |
| `In' analytical Note | China Quarterly Vol. 256 ; Dec 2023: p.939 - 959 |
| Journal Source | China Quarterly No 256 |
| Key Words | Technological innovation ; Venture Capital ; US–China competition ; GGFs |