Australia looks to China small business venture capital foundation
A new venture capital foundation aiming to raise money for China’s small businesses to help relieve their financing hardships is a model that Australia should consider, says the Council of Small Business of Australia.
“The new venture capital foundation being established by Chinese authorities to help their small business community deal with the impact of the tightened credit and financing market is a model that the Australian Government should consider,” said Jaye Radisich, CEO of the Council of Small Business of Australia.
Radisich said that the Chinese foundation is designed to help push private capital to finance the growth of small businesses, which is exactly what small businesses in Australia need.
“A small business financing model similar to that being adopted in China could easily fit the Australian situation,” she said. “An Australian small business financing foundation could help small businesses overcome the setbacks they’ve faced during the GFC period with initial funding coming from Government, similar to the Australian Business Investment Partnership model and supplemented by insurance and securities companies over time.”
Radisich said small businesses in Australia and China have suffered as a result of many financing sources drying up. “China’s commercial lenders preferred to fund state-owned enterprises and large key projects, rather than small businesses. This is a similar story to what small businesses in Australia have faced.”
The China Association of Small and Medium Enterprises and the Shenzhen Junsheng Capital, a leading private equity and asset management company, will jointly operate the Chinese foundation.
China View reports that in the initial phase, the Chinese fund aims to raise 1 billion yuan (147 million U.S. dollars), with 2 billion more to be collected. The money will be raised through private offering.
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