JD Capital Attends NDRC Conference and Suggests on China’s Venture Capital Development
2017-09-12
On the anniversary of the issuance of “Several Opinions of the State Council on Promoting the Sustainable and Healthy Development of Venture Capital Investment” (Guo Fa [2016] No.53, hereinafter referred to as “10 National VC Opinions”), the 10 National VC Opinions Seminar was convened by the NDRC in Beijing on September 4. Attendees of the seminar included leaders of departments concerned of the Ministry of Science and Technology, China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Agriculture, the Ministry of Civil Affairs, the People’s Bank of China, the State-owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce, the State Intellectual Property Office, China Banking Regulatory Commission, China Insurance Regulatory Commission, State Administration of Foreign Exchange, and Legal Affairs Office of the State Council. As drafters of the National VC Opinions, they heard the opinions and suggestions the VC investment institutions proposed on the implementation of the document over the past year. Representatives from PE firms such as JD Capital, Sequoia Investment, Shenzhen Capital, Legend Capital, CITIC Capital, ORIZA Holdings, CCB International, Jiangsu Hi-tech Investment, NewMargin Capital, China Hi-tech Investment, China Science & Merchants Capital Investment, Zhejiang Merchant Venture Capital, Guangdong Yueke, Luxin Venture Capital, Bright Stone Innovation Investment, and Prosperity Investment also attended the seminar. Notably, these PE firms are employers of members of the Chairman Meeting of China Venture Capital & Private Equity Association (CVCA).
The attendees agree that “10 National VC Opinions” is of monumental significance to the development of China’s venture capital industry. One year after its release, the ministries and committees concerned had all made concrete measures for its implementation, with some policies issued. But in general, the efficiency of implementation and its outcome still lags behind expectations from the VC community. Representatives of the PE firms, in the light of their own practices, proposed lots of opinions and suggestions on issues in the implementation, such as investor and manager taxation policies, state-owned shares transfer standards, mechanisms of state-owned VC enterprises, fund management under the guidance of government VC, expansion of VC financing channels such as insurance investment, forex management of overseas VC investment, business registration of VC enterprises, policies of VC withdrawal and shareholding reduction, differentiated management of VC industry, VC credit system construction, filing and registration of VC institutions, as well as the establishment of a national VC association. Leaders of the ministries and committees listened to the statements, and responded to and exchanged ideas on policy implementation and promotion. It was recognized that the seminar, practical as it was, was of great significance as a means to honor one-year anniversary of the “10 National VC Opinions”. Not only did it enhance the communication and mutual understanding of PE firms and policymakers, but promote the implementation of “10 National VC Opinions” and give better play to its political effects.
The seminar was presided by Xu Xiaobo, Deputy Director of the Department of Fiscal and Financial Affairs, NDRC, Zhang Weixing, Deputy Director of the Department of Resource Allocation and Management, the Ministry of Science and Technology, Liu Jianjun, Deputy Director of the Department of Private Fund Supervision, China Securities Regulatory Commission, and Shen Zhiqun, Chairman of CVCA attended the seminar,
What’s the “10 National VC Opinions”?
On September 20, 2016, the State Council issued “Several Opinions of the State Council on Promoting the Sustainable and Healthy Development of Venture Capital Investment” (hereinafter referred to as “the Opinions”), also called the “10 National VC Opinions” in the market. This is the first systematic policy document aimed at promoting the sustainable and healthy development of venture capital investment in China.
As the first systematic policy document aimed at promoting the sustainable and healthy development of VC investment in China, and a consensus among all parties, the Opinions focuses on key tasks, targets at solving existing problems, and specifies responsibilities with long-term development in mind. Aiming at building an all-around policy and service system involving not only enterprises and government agencies, but also industrial associations and all kinds of service institutions, the Opinions attempts to cover all links in the operation of VC enterprises (i.e. financing, investment, management, and withdrawal) and specifies the general requirements, guiding philosophy and basic principles for promoting the sustainable and healthy development of VC investment. Furthermore, 20 policy measures falling into 9 major categories are proposed, namely incubating diversified VC investment entities, expanding sources of VC investment capital, intensifying policy support, improving laws and regulations, perfecting withdrawal mechanisms, optimizing market environment for VC investment, promoting two-way opening-up, and strengthening industrial self-discipline and service system.