By Hao Zhou (chinadaily.com.cn)
Updated: 2007-07-17 14:21

The Ministry of Finance and the Ministry of Science and Technology will jointly offer a special fund of 100 million yuan (US$12.8 million) to encourage (VC) companies to invest in technology-based small- and medium-sized enterprises (SMEs).

Enterprises and service institutes pioneering in investment and VC management for minor technology enterprises and infant medium and small technology enterprises will benefit from the fund.

The fund will support VC investments in four ways. First, it will buy shares in VC investors; second, it will invest jointly with VCs in technology startups; third, it will provide some allowance against risks to VCs that have invested in technology startups; fourth, it will subsidize infant small ventures with promising profits but high risks.

To ensure standardized operations, the Ministry of Finance and the Ministry of Science and Technology will bring in a third-party organ to assess the performance of the fund.