Venture fund 'on the way'

The nation's new venture capital fund for emerging industries, totaling 40 billion yuan ($6 billion), is just around the corner, a government official said on Thursday.

"We are speeding up the operation of the fund ... and local governments are ready to pour in. It will be very beneficial for the development of venture capital investment," Lin Nianxiu, vice-chairman of the National Development and Reform Commission, said at a news conference on Thursday.

The State Council gave the green light to the venture capital plan in early July, aiming to empower entrepreneurial innovation and boost industrial upgrading.

The fund will "bring the market into full play, and invest by way of private equity", while local governments will take up to 40 percent stakes to ensure the proportion of social capital is no less than 60 percent.

This initiative was introduced in response to the "mass entrepreneurship and innovation" program, which was raised by Premier Li Keqiang in September 2014, when the government worked hard to reinvigorate the moderate-growth economy by encouraging more people to start their own businesses and make innovations.

"China's entrepreneurship and innovation are enjoying a golden period," Lin said.

The number of newly registered enterprises exceeded 2.62 million in the first half of 2016, up 28.6 percent year-on-year, official data showed.

In the same period, the services industry accounted for a larger proportion of overall new businesses than a year earlier. There were 28,000 information or software service companies established in June, increasing 36 percent year-on-year.

Technology market transactions also witnessed a significant increase. Contract value amounted to 337.3 billion yuan, up 11.6 percent over the previous year.

In the first half of the year, the number of domestic patent applications rose to 1.44 million, up 37.8 percent year-on-year.

The next important task, according to Lin, is to improve the policy system for entrepreneurial innovation, especially to establish a safeguard mechanism for business failures.

"In this way, unsuccessful startups can deal with their assets in legal and reasonable ways such as transfers, mergers and acquisitions, liquidation and bankruptcy," said Lin. "Entrepreneurs, employees and investors would be able to exit in time and explore new opportunities."

He called for a more tolerant entrepreneurial environment, as market failures are not uncommon at the early stage of the business cycle.

Jing Shuiyu contributed to this story.