Well-put. Old enough to remember Wade's bon mot.

GGFs are the missing piece in understanding how China sustains its lead in cleantech and narrows the gap in semiconductors. Ignore them, and you miss the financial engine of China’s industrial strategy.

For Europe, the lesson is sobering: we talk “sovereignty funds,” but GGFs already operate as a parallel financial infrastructure on a scale we haven’t matched. This is how China turns finance into an industrial weapon.

GGFs embody a statecraft of patient capital. They extend time horizons beyond what private VC can tolerate — a decisive advantage in industries like batteries, chips, and green tech where scaling takes decades.

But GGFs are not without problems: regional duplication, weak governance, political meddling, and uneven returns. Still, they are a powerful institutional innovation in channeling finance toward strategic industrial goals.

Chinese GGFs also illustrate the “generative” power of China’s state capitalism. They don’t just allocate existing resources; they create new financial ecosystems where banks, local governments, and tech firms co-invest.

Unlike Western VC, which is demand-driven, GGFs are mission-driven. The state sets the priority, absorbs early-stage risks, and then lets private capital scale. The result: systemic financing of frontier sectors, not just unicorn chasing.

GGFs fuse financial engineering with developmental strategy: they mobilize local governments, SOEs, and private funds into joint ventures that embed industrial upgrading in financial circuits.

By 2023, China had more than 2,000 GGFs, managing over €0.6 trillion in capital. That’s larger than the total AUM of European venture capital. The scale alone shifts the balance of global techno-industrial competition.

GGFs are hybrid creatures: part state, part market. They combine public seed capital with private co-investment, lowering risks for investors while steering money into sectors that match state priorities (EVs, semiconductors, renewables). Mostly state tho