China has snagged the second spot in the world's fastest-rising venture capital (VC) markets, an industrial report by the Asset Management Association of China revealed on Sunday.
According to Xinhua, the report noted that the boom in China's venture capital market was driven largely by increased business interest in the country. As of May, official capital funds reached 7,055, accounting for around $146.8 billion for the market.
Furthermore, the report indicated that among the key drivers in the country's booming venture capital market are autonomous driving, biotech segments, smart transport developments, and artificial intelligence (AI).
It's not surprising that China reached this stage, analysts said. Over the past three years, the country's VC activities made up for almost one-fourth of the world's total venture capital volume.
Aside from autonomous driving and AI investments, theirs is another sector that saw increased venture capital funds over the past few months: 5G technology. Industry analysts believe the move is perfectly in line with Beijing's push towards 5G dominance.
The South China Morning Post reported earlier this month that Managing Partner at GGV Capital, Jixun Foo, is expecting to see more VC investments pouring into 5G segments and projects within the next three years or so.
Since the entire world is fixated on anything that would bring a bigger life to the Internet of Things (IoT), Foo is expecting to see more CV investments being directed towards 5G tech. This is because 5G is believed to be the strongest link towards achieving an internet connection that will spell growth in the digital economy.
As confirmed previously by the Chinese government, the country has its eyes set on enhancing its tech environment. Beijing has been encouraging tech innovation over the past couple of years but this year gave China a stronger sense of building its own powerful tech circle.
Investments in tech are believed to be part of China's bid towards self-dependence after the United States blacklisted Chinese tech giant Huawei from cooperating with American firms in the business.
For the first half of 2019, data revealed that China's investments in high-tech products increased by 10.4 percent compared to the same period last year. As for high-tech services, capital venture investments soared by 13.5 percent, further indicating the country's focus on technology.
China is trying to resolve a trade dispute with the U.S. and negotiators are set to discuss a potential trade deal in Shanghai on Tuesday through Wednesday. Despite the trade war, the country is focused on developing an economy that speaks of reliable technology and products.
