China launches second phase of SME development fund to support IPOs

China is preparing to launch the second phase of its National SME Development Fund to increase financial support for small and medium-sized enterprises and innovative startups, particularly in advanced technology sectors. The new phase aims to facilitate the initial public offering (IPO) process for eligible businesses while attracting additional private and venture capital to the sector.

The Ministry of Industry and Information Technology (MIIT), along with nine other agencies, has outlined this initiative as part of a five-year plan to promote SME growth. The fund is intended to act as a “leader and catalyst” for private investment in high-tech industries.

Since its establishment in September 2015, the fund has created 46 sub-funds with total investments exceeding 120 billion yuan (approximately 17.6 billion USD), supporting over 2,000 enterprises. Data from China Galaxy Securities indicates these investments helped 92 companies complete IPOs. The fund has also completed divestments from over 200 projects, achieving an overall return rate of approximately 15%.