China Rolls Out Big-Ticket VC Funds to Back “Hard Tech” Startups

With input from Reuters and Bloomberg.

Beijing – China is moving in a big way to back the kind of deep, future-focused technologies that could shape its economic and strategic edge – launching a set of state-linked venture capital funds aimed squarely at “hard tech” sectors like semiconductors, quantum computing and aerospace.

According to state media and reporting from Reuters and Bloomberg, three new venture funds were unveiled Friday, each with more than 50 billion yuan (roughly $7 billion) in capital. Collectively, they’re designed to funnel long-term investment into early-stage companies that are tackling tougher, resource-heavy technologies rather than “soft” internet-style services.

The funds will focus on startups with valuations below about 500 million yuan – a sign China wants to nurture emerging players before they grow too big. No single investment from these funds will exceed 50 million yuan under the current plan, suggesting a broad spread of smaller bets rather than large, blockbuster deals.

Targeted industries include:

• Integrated circuits and chips;
• Quantum technology;
• Biomedicine and brain-computer interfaces;
• Aerospace technologies.

These areas are central to Beijing’s push for independence from foreign tech suppliers and long-term industrial strength.

The launch isn’t just about a few cash injections. China also rolled out a National Startup Investment Guidance Fund backed by 100 billion yuan from the finance ministry, funded via special sovereign bonds, with additional regional funds covering major economic hubs like Beijing-Tianjin-Hebei, the Yangtze River Delta and the Greater Bay Area.

Officials say this layered approach – mixing national and regional backing – is meant to cultivate homegrown tech champions and create a more efficient investment ecosystem for challenging tech sectors where the US and other global players also compete.

Beijing’s move comes as global tensions over technology leadership – especially in semiconductors and AI – remain high. By channeling public capital into areas like quantum computing or aerospace, China is signaling it wants less reliance on overseas tech and more domestic innovation muscle.

Analysts see this as part of a broader strategy to spark breakthroughs in sectors that feed into both civilian industries and national security priorities – from next-gen chips to advanced medical tech. Whether these funds can produce globally competitive leaders remains to be seen, but the scale of the push makes it clear China is doubling down on critical technologies.