1. The government as venture capitalist: An investigation into the public venture capital schemes in China Dr Jun Li University of Essex

5. Empirical evidence Author Year Scheme findings SBA 2004 SBIC, USA the composite IRRs were -12.3% for the SBA against 20.4% for the private investors and that the estimated total value to capital was 0.78 as of September 2004, compared to 1.3 for the private partners, indicating a positive return for the private partners. Cumming and MacIntosh 2006 labour fund initiative in Canada no evidence that the programme boosted the aggregate amount of venture spending in each province. Da Rin, Nicodano and Sembenelli 2006 venture capital funding across 14 European countries for every dollar being handed out by a government-sponsored programme or fund, private investors put a dollar less into the sector. Lerner 2009 Yozma, Israel the high returns to funds that served as precursors to larger, follow-on funds, a good number of spin-off of local Yozma funds partners, increased capitalisation of the ten original Yozma groups, and a higher ratio of venture investment to GDP

9. 1985 The Government firstly introduced the VC concept in the ‘CCCC Decisions on Reforms of S&T System’ in March and approved the 1 st VC firm ( China New Technology Venture Capital Corporation , CNTVC) in September 1991 The State Council in ‘Provisions of Policies for National High-Tech Development Zones’ in March specifies that high-tech development zones can establish VC funds and that more established zones can set up VC corporations. This prompts local government involvement in VC 1999 The CCCC and State Council in ‘Decisions on Enhancing Technological Innovation, Developing High-Tech and its Industrialisation’ in August encouraged the development of the VC market, VC firms and VC funds. Subsequently, policies were issued by the central and local governments 2001 The State Council’s ‘Provisions of Setting up Foreign VC Firms’ took effect in September. It removed foreign VCs entry barrier to China 2004 The Small and Medium Enterprise Board in Shenzhen Stock Exchange was launched in May. It offers VC an exit route. ‘ Securities Law’, ‘Company Law’ and ‘Partnership Law’ were issued. 10 Ministries jointly issued ‘Provisions on Management of VC Firms’ in November. The VC’s legal and regulatory environment improved. 2005 2006 2007 2009 The State Council in ‘Notice on Implementing the National Outline of Medium and Long-Term S&T Development (2006-2020)’ in August encouraged local governments and departments to establish VC Guiding Funds (VCGF). The Development and Reform Commission, Ministry of Finance and Ministry of Commerce jointly issued in ‘Directives on Establishment and Management of VCGFs’ in October Evolution of the VC Industry and Public VC Schemes in China The Growth Enterprise Market (GEM) in Shenzhen Stock Exchange was launched. It offers an additional exit route for VC investments. 2008 The Ministry of Finance & State Administration of Taxation issued Notice on Taxation Policy in Support of VC Firms. The first national VCGF was launched.