With more policy support on the horizon, State-backed funds are expected to play a leading role in China's efforts to develop "patient capital" that is needed to strengthen technological self-reliance, officials said on Wednesday.

"We will first nurture State-owned enterprises' funds and government investment funds into 'patient capital', which will play a leading role by setting an example," said Li Chunlin, deputy head of the National Development and Reform Commission.

"Patient capital" refers to investment that generates healthy returns over the long run rather than taking quick profits. The term has become a buzz phrase after a top-level meeting in April stressed that it is essential to actively develop venture capital investment and strengthen patient capital.

At a news conference on Wednesday, Li stressed that patient capital is crucial for sci-tech self-reliance as many disruptive innovations do not generate fast investment returns in the early stage.

To develop patient capital, it is important to both fully respect the role of the market and leverage the government's function, Li said, adding the State Council, China's Cabinet, has called for measures to assist investment funds that are funded by the government and SOEs in acting as patient capital.

The General Office of the State Council unveiled a document on June 19 containing 17 sets of measures to promote the high-quality development of the venture capital sector. The document required efforts to improve fund performance evaluation and introduce fault tolerance for VC funds that are funded by the government and SOEs.

Wang Hailin, an official from the State-owned Assets Supervision and Administration Commission of the State Council, said the anticipated measures will include relaxing fund size limits, raising the proportion of investments by centrally administered SOEs, focusing on the evaluation of long-term investment return and defining conditions for exemption from liability for due diligence.

She said the commission will also encourage centrally administered SOEs to fully utilize existing policies and make long-term investments in early-stage, small-size, high-tech companies to aid the development of strategic emerging industries and nurture new quality productive forces.

Official data showed that China's centrally administered SOEs so far have managed 126 VC funds with a total size of 52.9 billion yuan ($7.28 billion), having invested 31.3 billion yuan in sectors like advanced manufacturing, energy, electronics and information.

Li said China will also strengthen patient capital by encouraging insurance companies to invest more in VC funds and expanding the pilots where banks' financial asset investment companies can make equity investments.

Wu Meng, head of the China Securities Regulatory Commission's Department of Market Supervision II, said the commission is supporting the VC sector through measures such as facilitating mergers and acquisitions, piloting return distribution to VC investors in kind instead of in cash and ensuring smooth channels for overseas listings.