Frontier of Chinese Financial Theory (III)

Author: Li Yang, Wang Guogang, et al
Publisher:
Publish Date: 2003-12-01
Features: Since the late 1990s, the development of venture capital systems has become a hot topic in the global economic community. Governments worldwide have invested significant resources and financial support to foster the growth of their domestic venture capital systems. The fundamental reason for this trend lies in the fact that the global economy has entered a new era based on knowledge. The defining characteristics of this era are that knowledge-intensive industries have become the core of all industries, serving as a decisive factor for a country to gain long-term competitive advantages. In the long run, it is not the increase in capital investment (accumulation) and labor input, but the development of human resources and the resulting technological progress, that become the key driving forces for sustainable economic growth. To promote technological advancement, particularly the industrialization of high-tech industries, the crucial factor lies in creating an effective financial support system. In this sense, establishing a venture capital system is a strategic initiative that determines whether China can remain at the forefront of the world in the 21st century.