Village fortunes

As the rural economy seeks more sustainable growth amid a property cooldown, an increasing number of urban villages are following in Zhang's footsteps, jumping on the bandwagon of technological advancement and becoming a new source of venture capital.

The trend has accelerated as the venture capital industry finds it hard to raise funds because of the economic slowdown, the COVID-19 pandemic, and geopolitical tensions, all of which have dampened investment sentiment.

According to a report by Zero2IPO Research - a Beijing-based research firm that tracks the Chinese mainland's venture capital market - up to 1,601 funds had completed a new round of raising capital in the first quarter of this year - down 7.6 percent from the same period a year earlier. The 353.2 billion yuan ($48.77 billion) raised in the first three months of 2023 represented a 33 percent year-on-year decline.

China's venture capital funds hit 14 trillion yuan by the end of last year - the second-largest in the world, accounting for nearly 70 percent of the country's privately offered funds - according to He Yanchun, president of the Asset Management Association of China, a self-regulatory organization representing the mutual fund industry.

"But due to a number of unexpected factors, including the COVID-19 pandemic and the changing internal and external situations, (the level of) complexity, severity and uncertainty in the country's economic environment is on the rise," he told a venture capital investment conference in Wenzhou, Zhejiang province, in May.

"Against the backdrop, the venture capital industry is facing temporary setbacks - difficulties in raising funds, heavy pressure on post-investment management, and unstable exit expectations."