Chapter 6

Emerging Asian Giants

Shenzhen Capital Group: A Government-Supported Venture Capital Firm1

Shenzhen Capital Group (SCGC) was established in 1999 in the southeastern Chinese city of Shenzhen, which is just across the “border” from Hong Kong. The local Shenzhen government was the primary sponsor of SCGC and invested RMB 500 million (approximately $70 million in 1999) along with RMB 200 million invested by corporate investors for an RMB 700 million initial investment fund. Although the government was the largest shareholder, the investment fund managers were given significant autonomy to professionally manage the fund and make investments based on market-economy fundamentals.

The goal was to develop an alternative support system, besides ...

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