The mainland has launched a 100 million yuan venture capital fund to support domestic high-technology start-ups, according to the Ministry of Finance. Beijing has been encouraging venture capital as a way of boosting technological innovation and financing for small firms, which are frequently turned down by banks for loans. 'Even a local district, such as Pudong and Xu Jiahui in Shanghai, has such a fund set up. The question is why the size of the Ministry of Finance fund is so small,' said a venture capitalist. The new state-sponsored fund would not be enough for two deals, based on the average size of US$8.52 million of a single venture capital investment in the mainland in a survey by Dow Jones/VentureOne. 'This is a government gesture showing support for venture capital investment and high-technology start-ups,' said Zhang Su Yang, a partner of IDG Technology Venture Investment. Some regional governments have also set up similar funds to spur technology development. The Tianjin municipal government set up a three billion yuan fund last month mainly for investment in infrastructure. 'Shanghai has a fund of about one billion yuan in size. Jiangsu has one of more than one billion yuan,' Mr Zhang said. The fund would also invest in fund management firms involved in venture capital investment, the Ministry of Finance said.