China MIIT Launches Second SME Fund for Tech IPOs
China's Ministry of Industry and Information Technology (MIIT) is launching the second phase of its National Small and Medium-sized Enterprise (SME) Development Fund. This phase targets early-stage "hard tech" firms, focusing on initial public offering (IPO) incubation and attracting private capital.
New Fund Phase Targets Hard Tech
China's Ministry of Industry and Information Technology (MIIT), alongside nine other ministries and agencies, has launched the second phase of its National Small and Medium-sized Enterprise (SME) Development Fund. This initiative aligns with China’s 15th five-year plan for promoting SME development.
Officials from MIIT confirmed the new phase during an August 2026 State Council Information Office press conference. The fund aims to support early-stage "hard tech" companies, driving their readiness for initial public offerings (IPOs).
Catalytic Role for Private Capital
The fund's second phase will enhance support for inclusive financing and IPO readiness. MIIT officials stated it would play a "guiding and catalytic role," attracting more venture and private capital for tech-focused SMEs. The first phase, established in September 2015, had already created 46 sub-funds by March 2026.
These sub-funds managed a total capital pool exceeding 120 billion yuan (US$17.6 billion), according to data from China Galaxy Securities.
Strong Returns from First Phase
China Galaxy Securities data further reveals the first phase invested in over 2,000 enterprises, leading to 92 IPOs. The fund also completed exits from more than 200 projects that reached specific milestones, demonstrating an overall return of approximately 15 per cent.
This track record underpins confidence in the new phase's ability to channel private capital into innovative, early-stage entities with long-term prospects in critical technology sectors.
This second fund phase shows China’s continued commitment to fostering its domestic technology sector and capital markets. For investors, it creates new avenues for deploying capital into early-stage "hard tech" firms with state backing, potentially de-risking some ventures.
Chinese tech startups will find enhanced support for navigating the complex IPO process, accelerating their path to public markets. This could increase the volume and quality of tech listings on Chinese exchanges, offering more diverse investment opportunities.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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