A high-tech development zone in the city of Wuhan has been abuzz since March, when the local government announced the creation of a 10bn-yuan ($1.5bn) investment vehicle. The Optics Valley Hi-Tech Venture Capital Guidance Fund aims to combine the animal spirits of private capital with the industrial objectives of the state. Its general manager, Li Yang, told state media in late May that more than 80 private investors had submitted formal proposals. Ten of these are already in the process of being approved.
State cash is pulsing through China’s private-capital markets. Between 2015 and 2021 around 2,000 so-called “government guidance funds” collectively raised almost
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