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China Debuts Bonds with Risk-Sharing Safety Net to Drive Tech Funding

Published: Jun. 20, 2025 6:10 a.m. GMT+8

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By offering credit enhancements and guarantees, Beijing aims to broaden access to long-term capital and accelerate its ambitions for technological self-relianc

China is testing a new way to channel capital into its strategic technology sector, with five private venture capital firms collectively raising 1.35 billion yuan ($188 million) through the country’s first bond issuance supported by state-backed risk-sharing mechanisms.

The initiative is a direct policy response to the chronic fundraising challenges faced by China’s private investment firms — critical players in supporting early-stage, high-tech ventures.

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Five private VC firms in China raised 1.35 billion yuan ($188 million) via the nation’s first bonds with state-backed risk-sharing, addressing fundraising challenges in the tech sector.
May 2025 saw a record 363.8 billion yuan in tech bond issuance, contributing to a total of 756.5 billion yuan in the first five months, up 76.4% year-on-year; average May financing cost hit a record low of 1.77%.
The initiative aims to boost long-term capital for high-tech industries and reduce structural imbalances in the bond market.

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Who’s Who

Legend Capital: Legend Capital is one of five private venture capital firms that collectively raised 1.35 billion yuan ($188 million) through China's first bond issuance supported by state-backed risk-sharing mechanisms. This initiative aims to channel capital into China's strategic technology sector and address fundraising challenges for private investment firms.

CAS Star: CAS Star is one of five private venture capital firms that collectively raised 1.35 billion yuan ($188 million) through China's first bond issuance supported by state-backed risk-sharing mechanisms. This initiative aims to channel capital into China's strategic technology sector, supporting early-stage, high-tech ventures and advancing technological self-reliance.

Addor Capital: Addor Capital is a Chinese private venture capital firm. It's one of five firms that participated in China's first bond issuance supported by state-backed risk-sharing mechanisms. This initiative aims to address fundraising challenges for private investment firms and channel capital into China's strategic technology sector, including AI and semiconductors.

Jolmo Investment Management Co. Ltd.: Jolmo Investment Management Co. Ltd. is one of five private venture capital firms that participated in China's debut bond issuance to channel capital into its strategic technology sector. This initiative, backed by state-owned risk-sharing mechanisms, aims to support early-stage, high-tech ventures and broaden access to long-term capital for technological self-reliance.

Oriental Fortune Capital: Oriental Fortune Capital is a Shenzhen-based private venture capital firm. It participated in China's first bond issuance supported by state-backed risk-sharing mechanisms, issuing 10-year notes worth 400 million yuan. These bonds were fully guaranteed by China Bond Insurance Co. Ltd. and attracted significant investor interest with a low coupon rate.

China Bond Insurance Co. Ltd.: China Bond Insurance Co. Ltd. is a state-owned credit enhancement provider. It fully guaranteed the 400 million yuan, 10-year notes issued by Shenzhen-based Oriental Fortune Capital, with additional counter-guarantees from the Shenzhen municipal government. This is part of China's initiative to channel capital into its strategic technology sector.

Citic Securities: Citic Securities' research report indicated that the declining financing costs in China's technology innovation bonds reflect participation from high-quality issuers, robust credit markets, and sustained policy support. This highlights their analysis of the favorable conditions in the bond market for these innovative financial instruments.

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What Happened When

Early 2021：: China began moving toward market-based financing tools with the launch of technology innovation bonds.

2025：: Shenzhen-based Oriental Fortune Capital issued 10-year notes worth 400 million yuan, fully guaranteed by China Bond Insurance Co. Ltd., with counter-guarantees from the Shenzhen municipal government.

First five months of 2025：: Issuance of technology innovation bonds surged to 756.5 billion yuan, a 76.4% increase from a year earlier.

May 2025：: People’s Bank of China and China Securities Regulatory Commission expanded eligibility for technology innovation bonds to include private equity and venture capital firms.

May 2025：: A record 363.8 billion yuan in new technology innovation bond offerings was issued, up 123% month-on-month.

May 2025：: Average financing costs for these bonds fell to a record low of 1.77%.

May 2025：: Pan Gongsheng, central bank Governor, said the Sci-Tech Bond Board was nearing launch and near-term offerings were expected to exceed 300 billion yuan.

As of June 18, 2025：: 722 technology innovation bonds had been issued in 2025, including by central state-owned enterprises, local government-backed firms, private companies, and listed entities.

Thursday, June 19, 2025：: Five private VC firms including Legend Capital, CAS Star, Addor Capital, Jolmo Investment Management Co. Ltd., and Oriental Fortune Capital participated in the first round of bond issuance supported by state-backed risk-sharing mechanisms, raising 1.35 billion yuan.

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