China wants ‘patient capital’ to fund its tech drive. Will slow and steady win the race?
- China’s Politburo has called for ‘patient capital’ to fund emerging industries, backers with a more long-term outlook and high risk tolerance
- A greater focus on the far future, analysts say, is more conducive to the tech breakthroughs country needs to transition economy
China will mobilise what the country’s leaders have referred to as “patient capital” – funds oriented towards the longer term with greater risk tolerance – to bankroll its strategy to leverage emerging technologies into a force for economic development.
“To develop new quality productive forces and strengthen the development of future industries … We should actively develop venture capital and scale up patient capital,” said the official readout from Tuesday’s meeting of the Politburo, a high-level body of the Communist Party.
As authorities look to implement this blueprint and move resources into research, the Politburo is identifying patient capital as a critical source of funds, analysts said.
“Patient capital” was coined by American economist Stephen Kaplan in 2021 in his book dissecting the political economy of Chinese investments in the Americas.
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Since then, the term has taken on more meaning in China’s official discourse, as state assets and securities watchdogs have called for longer-term financial resources to be pooled into key sectors.
