This is a guest post by one of my most promising students, Huang Zaiqi, is currently  the director of investment projects for Shenzhen Institutes of Advanced Technology ,Chinese Academy of Sciences. A adapted version has been submitted for publication in China Daily.

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Bridging China and India Innovation

Under the uncertain trend of global economy, China and India as two economic express have shown their strong boosting power in recent years. They have promoted a sound development of world economy, while drawing more and more attention from various institutions and investors around the world as well. When everyone began to understand the oriental dragon with great interest, they found out that the Western model they brought is no longer applicable to this wonderful country…

In the innovation process of venture capital industry, the West and the East have taken two completely different roads, explored and innovated under their respective financial ecological environment. “Angel Investment” can be said the rudiment of American venture capital, it is a spontaneous institutional innovation from private bodies based on the expected profit growth of growing minor enterprises, which has been promoting the progress and growth of American venture capital industry. In the creation and development of risk investment, the government mainly provides legal and policy supports. The venture capital institution induced from bottom to top is playing roles as venture capital providers, managers and social role as service providers under the investment philosophy of high-input, high-risk, high-participation and high-profit. On the contrary, venture capital in China has a completely different background and process of development. According to historical records, the creation of venture capital in China issued from the technology system reform in 1985, when the central government was trying to change the situation that R&D funding planned and allocated by the government, so as to solve the problems as slow transform for China’s scientific and technological achievements and insufficient capital investment. This makes China’s venture capital play a social role “to provide funds, to promote high-tech transformation” for a long period of time, and the close interrelationship between the subsequent rapid development or recession of industry and government decision-making.

In recent years, since China’s capital market is gradually mature and the investment withdrawal channels are gradually broadening, and under the policy circumstances of China’s vigorous efforts to develop strategic emerging industries, China’s VC / PE investment market remained active in the investment market, innovation in the industry has become more flexible and proactive. For example, what presented now is a kind of capital fund established by Shenzhen Institutes of Advanced Technology, Chinese Academy of Sciences. It is an innovative approach, of which “technology + capital” mode not only brings cash investment to enterprise, but also the technology investment from technical support as well.Mr. Huang Zaiqi currently is the director of investment projects for Shenzhen Institutes of Advanced Technology ,Chinese Academy of Sciences, he is engaged in investment and financing work for companies. In accordance with Chinese traditional point of view,Chinese Academy of Sciences as a national research institute only undertakes the planning and key technologies of national and local significant scientific research projects. However, in CAS-SIAT, where Mr. Huang Zaiqi comes from, it has an effective integration and improvement of “Four in One” innovative management model, so as to integrate “educational + research + industry + capital”. In the process of scientific research to market, Angel Investment will be implemented in seed phase and development phase by CAS-YUCHENG of CAS-SIAT; when the company grows rapidly into expansion phase, venture capital funds will be carried out by CAS-ANGSEN, CAS-DAOFU, and CAS-DASHENG of CAS-SIAT. In addition, Mr. Huang Zaiqi will investigate a lot of high-tech enterprises, when companies possessing investment value were selected, he will help the companies to resolve technical problems and overcome technical bottlenecks on research strengths of CAS, so as to bring a better market prospect, while making equity investment by appraising technology as capital stock and cash investment as well.

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