China Just Announced A Massive New $6.5 Billion Venture Capital Fund

China's technology scene is heating up with an announcement this week of a massive new $6.5 billion government-backed seed-stage venture capital fund, TechCrunch reports.

Launched by the Chinese government, the fund will also include investment from private investors. "The establishment of the state venture capital investment guidance fund, with the focus to support fledgling startups in emerging industries, is a significant step for the combination of technology and the market, innovations and manufacturing," said China's State Council.

Reuters reports that as a result of China's historically strictly controlled economy, the local venture capital market "remains small." But available capital rose by 157 percent over the last year, with 83 new funds launched in the first half of 2014. According to the Financial Times, "China's private equity and hedge fund industries have ballooned over recent years."

This new fund is further evidence of the Chinese government's commitment to market forces, and determination to help develop the homegrown tech industry. There's already multiple success stories, notably Xiaomi, a technology company now considered the most valuable startup on the planet.

The fund is expected to be established formally within weeks.