New rules paving way to venture-capital funds

Young mainland companies will soon be able to tap a source of financing that helps turn many US minnows into hi-tech giants - venture capital.

A multi-ministry committee is finalising rules governing the establishment of venture-capital funds to nurture mainland equivalents of Microsoft and Intel.

'We are giving the finishing touches to the regulations which will be submitted shortly to the State Council for debate and approval,' a State Development and Planning Commission official said.

The Ministry of Foreign Trade and Economic Relations, the Ministry of Science and Technology, and the China Securities Regulatory Commission are also involved in the drafting of the regulations. They cover two broad categories of funds - for venture capital and industrial investment.

Venture capital is aimed at nurturing promising start-ups through funding and management advice, while industrial investment is used for financing projects with long-term returns.

'Venture-capital investment funds are also covered under the [industrial-investment fund] regulations we are finalising,' the official said.

Analysts said Premier Zhu Rongji's call in March to rejuvenate the country through science and education sparked interest in financially supporting small hi-tech or emerging ventures, which could become commercial winners.