Slump has little impact on startups

Jixun Foo, managing partner of global venture capital firm GGV Capital, also said the market slump has had little influence on its investment strategies, and in fact could be good as it has cut the amount of speculative investment cash, often short-term, flowing into the market.

Wang Mingfu, chairman of Hejun Consulting Group, one of the largest consultancies in China, however, said he was concerned the shock may still have an effect on startups, especially those in the Internet sector.

"The size of Internet startup deals will shrink sharply, influenced by a slump in valuations of larger Internet firms on the secondary market," said Wang.

"As a result, financing will become more difficult and many companies will die, starved of funds."

Figures from Zero2IPO Group, a service provider for China's venture capital and private equity industry, show that 297 deals were completed in the country's VC and PE markets in June, a 68.8 percent month-on-month rise. But the value of 219 of those was $5.1 billion, a 4.79 percent fall.

The government unveiled its Internet Plus action plan earlier this month, aimed at integrated the Internet with traditional industries to fuel economic growth.

The countrywide digital drive was first revealed by Premier Li Keqiang in March, during his Government Work Report to top legislators.

It mapped out a number of development targets and supportive measures which Beijing hopes can establish new industrial models, integrating the Internet with key sectors including entrepreneurship and innovation, manufacturing, agriculture, energy, finance, public services, logistics, e-commerce, biology and artificial intelligence.