Quantum Strategies Are Converging As China Turns to Venture Capital Model to Expand Its Quantum Industry

Insider Brief

• China is adding venture-style financing to its state-led quantum strategy to support startups and accelerate commercialization.
• Three regional funds hold a combined $17.5 billion for strategic industries, although China has not disclosed the portion allocated to quantum technology.
• China’s model is adopting market-oriented features as the U.S. expands government purchasing and investment to support its private-sector quantum ecosystem.

China is adding venture-style financing to its state-led quantum strategy, combining public capital with regional investment networks to accelerate the formation of technology companies.

Three regional funds established through China’s National Venture Capital Guidance Fund have raised a combined 121.8 billion yuan, or about $17.5 billion, according to the The National Bureau of Asian Research. It’s important to not that the billion-dollar fund covers quantum technology, however, it also covers other strategic technologies, including artificial intelligence, semiconductors, biotechnology, aerospace and future energy.

The structure shows China adopting parts of the market-oriented model commonly associated with the United States, Hideki Tomoshige, a fellow for Renewing American Innovation at the Center for Strategic and International Studies, said in an In a Q&A conducted by Gabriela Hartlage. According to Tomoshige, rather than relying solely on government laboratories and large state institutions, Beijing is using public money to attract private investors and support younger companies.