The China government is very determined to keep their economy chugging along while fostering more innovative and entrepreneurial companies. If you need any more proof this report in Sina.com is just another indication of what the current administration is willing to do to prime the pump. According to the report, Capital Co., a state-controlled VC fund, is launching a 100 billion yuan fund – a bit over USD $15 billion. This amount is expected to double in coming months to more than USD $30 billion. The fund will invest in tech innovation, small and micro enterprises – among other things.
The announcement of another state-controlled VC fund comes on the heels of a report last month saying the “start-up party” was coming to end. ECNS said China VC funds in Q2 of this year experienced a dramatic drop over the same period year prior. This was said to be the lowest amount in nearly three years.
As for Fintech, KPMG reported that USD $2.4 billion went into Fintech during the first three months of 2016 – almost half of the global total. This was an increase from the prior quarter (Q4 2015) that was only $500 million. As for Q2, Fintech in Asia captured USD $772 million, a decrease of 69% from Q1’16 but the majority still came out of China (about USD $600 million).
So in trying to parse the “tea leaves”, the overall investment ecosystem may be cooling a bit but Fintech in China remains hot.
