Shanghai Introduces $18bn State Investment Giant to Support Startups

Shanghai is amalgamating its two primary state-owned investment firms to form a 130 billion yuan ($18 billion) investment powerhouse aimed at backing innovation and technology startups. This new entity will concentrate on cultivating industry leaders in science and technology.

A Focus on Innovation and Technology Startups

The merger is being supervised by a group led by Yuan Guohua, who formerly held positions as the party chief and chairman of Shanghai Lingang Economic Development Group, the state-owned developer of Shanghai’s largest industrial park. The fusion of these two companies will result in an investment behemoth boasting over 132.5 billion yuan in total assets.

Shanghai’s state-owned asset administration disclosed the consolidation plans of Shanghai State-Owned Capital Investment and Shanghai Science and Technology Venture Capital (Shanghai STVC), both of which are under the city government’s control.

Key Players in State-Owned Capital Investments

Shanghai State-Owned Capital Investment, established in March 2021, has 10 billion yuan in registered capital and holds shares in several of Shanghai’s largest state-owned enterprises. These include Shanghai International Port, Arcplus Group, and Shanghai Electric Group. The company also oversees two equity investment funds established with state investors, with a combined size surpassing 25 billion yuan.

On the other hand, Shanghai STVC, founded in 1992, is the sole state-owned venture capital firm focusing on early-stage tech startups. It operates various investment funds targeting innovation and emerging industries.

Building Industry Leaders in Science and Technology

The revamp of Shanghai’s state-owned investment platforms is a significant stride towards developing industry leaders in science and technology innovation capable of competing on the international stage, according to Zhang Wei, head of the Organization Department of the party’s Shanghai committee.