China’s unicorns set for capital boost after dwindling flock catches Xi Jinping’s eye

President Xi Jinping asked why the number of China’s new unicorns, start-ups valued at more than US$1 billion, had been dwindling

Analysts say China needs to mobilise domestic venture capital and resources to nurture home-grown unicorns, while reducing reliance on foreign venture capital

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President Xi Jinping with representatives from businesses and academia attending a symposium in Jinan, Shandong province. Photo: Xinhua

Published: 9:15am, 30 May 2024Updated: 11:56am, 30 May 2024

With a falling number of unicorns – start-ups valued at more than US$1 billion – having caught the eye of China’s top leaders, analysts expect more domestic resources to be deployed to nurture home-grown enterprises amid shifting geopolitics.

At a rare face-to-face meeting with entrepreneurs last week, President Xi Jinping asked why the number of new unicorns had been dwindling in recent years, the People’s Daily revealed in a report on Tuesday.

“Now that the president has signalled his concern, I think state support will be beefed up to nurture them,” said Xin Qiang, a professor with Fudan University’s Institute of International Studies in Shanghai.

Analysts expect domestic venture capital and resources to be mobilised, especially related to technology, while a reliance on foreign venture capital would also be reduced having previously been the driving force behind the growth of China’s unicorns.

At last month’s meeting, China’s Politburo had already called for “patient capital” – funds oriented towards the longer term with greater risk tolerance – to support emerging industries.

Earlier last week, China also set up its third planned state-backed investment fund with a registered capital of 344 billion yuan (US$46 billion) to boost its semiconductor industry.