The latest policy moves jointly issued by the State-owned Assets Supervision and Administration Commission of the State Council and the National Development and Reform Commission are definitely good news for those who have achieved breakthroughs in certain technological fields. It will help them use their technological breakthrough to set up enterprises.

Reports say that the latest move allows State-owned enterprises to establish venture capital funds to invest in start-ups that feature four characteristics, namely early-stage, small-scale, long-term investments and hard technology.

A nascent-stage enterprise needs funds to increase opportunities for growth. Small-scale refers to micro- and small-businesses and in this category funds would be directed toward those in need rather than those already well-resourced. This is of significant importance for various startups because technological innovation companies generally consist of small teams that gradually grow into companies impacting society. The technologies developed by researchers in such companies benefit the whole of society. With national-level support, more such companies will have the opportunity to grow into big enterprises.

Long-term investment means committing to invest in innovative enterprises over an extended period, encouraging State-owned assets to become long-term and patient capital. Central enterprise venture capital funds could be extended for a duration of 15 years, nearly double that of general equity investment funds. This provides start-ups with more flexibility, preventing a single mistake from burying an entire promising industry.

Raising more investment for hard technology — which are tangible components that can be purchased and assembled into assistive-technology systems — will naturally benefit the country's long-term development. Consequently, venture capital funds will be directed toward areas where the technologies are needed for the transformation of scientific achievements and the growth of technological innovation enterprises.

Further, through market mechanisms, the central SOEs will attract commercial funds, thus promoting various types of long-term capital to focus on technological attributes, technical value, and emerging fields for effective investment. For start-ups focusing on China's urgently needed high-end technologies, such as semiconductors, space science, and genetic science, there will be strong support and the domestic companies are expected to grow fiercely and smoothly.