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Policy and investment key to entrepreneurship and innovation

Updated: Jun 6,2016 5:20 PM

As revealed by the inspection team of the State Council during its tour of provinces and municipalities in China, the mass entrepreneurship and innovation initiative is enjoying support measures from governments in different regions. However, the investment environment for private capital still has room to improve.

According to the inspection, some local governments have set up various industrial funds, established service agencies, cultivating innovative talent and providing low-cost services for small and micro-sized enterprises.

The government of Fujian province rolled out measures for online entrepreneurship, supporting the development of an incubation base for entrepreneurship led by private enterprises.

Also, the government of Qinghai province invested 50 million yuan for university students to embark on entrepreneurship and innovation activities via their own developed technologies.

Despite intensified efforts in supporting mass entrepreneurship and innovation, private enterprises are still confronted with difficulties in private funding.

The inspection tour found the most pressing issues in private funding to be willingness to invest, and difficulties in investing and lending.

Several venture capital funds in Shenyang, capital city of Liaoning province, revealed that the Shenyang government requires 60 percent of capital for venture capital fund to be invested locally as long as they have a share of the government’s guidance fund. But they are normally reluctant to invest locally, given the economic condition of the region.

In Taiyuan, capital city of Shanxi province, a CEO from a listed company said that his firm, with hundreds of millions of yuan in its account, was planning to invest in urban intelligent parking facilities. But, as the construction will involve multiple departments, no one department is willing to take the lead in coordinating approvals for the project.

Moreover, in some regions, government’s supporting funds and loans from financial sectors tend to go to State-owned enterprises, resulting in a number of good projects and ideas from private enterprises having a hard time getting the funds and loans they need.

At the same time, private entrepreneurs are also hoping that local government can improve their general environment, such as enhancing their service quality, to provide a favorable market environment for mass entrepreneurship and innovation.