The “Made in China 2025” plan has seen more than USD$1 billion invested in artificial intelligence and strategic tech sectors since its launch in 2015.
KPMG said to The Financial Times the money is primarily early-stage funding for start-ups in key tech sectors that enjoy strategic support from the Chinese government, such as AI and robotics.
Local governments and state-owned enterprises have established “government guidance funds” for investment in domestic tech start-ups, with municipalities making capital allocations of between $10 million to $50 million.
The Hubei province government recently channeled 40 billion yuan to the Hubei Yangtze River Belt Industrial Fund, while the Jiangsu Provincial Government Investment Fund raised a total of 80 billion yuan as of the end of May.
According to data from Sun Hung Kai Financial these government guidance funds are on track to surpass private venture capital funds, with a total fundraising target of 3.3 trillion yuan as of September 2016, as compared to the 2.2 trillion yuan raised by private funds in 2016.
In order to accelerate the developments of fledgling tech companies, Beijing is also providing other forms of support including grants, interest-free or low-interest loans, subsidised rent and tax incentives.
Analysts say the mass investment drive has the goal of shoring up China’s economic efficiency via higher value-added manufacturing.
