Shanghai offers wider access to foreign funds to buy start-ups, signals more QFLP quota
Funding for unlisted Chinese companies has dried up over the past years, says Wang Feng of Ye Lang Capital, a financial services firm
Foreign asset managers will be given more freedom in making private equity and venture capital investment as the city cranks up growth in the financial and technology sectors, mayor Gong Zheng said, amid signs geopolitical tensions and regulatory clampdown have thwarted inflows.
“International asset managers will be encouraged to invest more in Shanghai’s technology firms and participate in the city’s innovative activities,” he said after the close of the annual International Business Leaders’ Advisory Council meeting in Shanghai. “We will create more synergies among capital, data, technology and talent.”
Funds raised for investment in unlisted Chinese start-ups peaked at US$132.7 billion in 2021, according to data compiled by Mergermarket. They slumped to US$67 billion in 2022 and US$45.4 billion in 2023. The amount stood at US$25.7 billion in the first half of this year.
“Shanghai and China have reasons to shore up confidence for investment in unlisted firms,” said Wang Feng, chairman of Ye Lang Capital, a Shanghai-based financial services group. “Funding for start-ups [in China] has dried up over the past years.”
Shanghai attracted US$10.2 billion of foreign direct investment this year through June, 20 per cent lower than the same period a year ago.
