Investments in tech spurred by government support

Investments by private equity and venture capital companies in China's telecommunications, media and technology industry are expected to recover in the coming months, fueled by a slew of stimulus measures to stabilize economic growth and the government's strong support for the TMT industry, according to a new report released by global consultancy PwC.

The report said the volume and value of PE and VC investment in the TMT industry declined more than 20 percent in the first half of this year compared with the second half of 2021, due to the resurgence of domestic COVID-19 cases coupled with escalating geopolitical tensions.

The TMT industry recorded 1,655 investment deals in the first six months, while deals with disclosed investment value amounted to $21.7 billion during the period.

Among the sub-sectors of the TMT industry, the technology industry drew the most attention from investors and retained the top spot for investment in the first half, with the volume and value in the technology sub-sector accounting for 81 percent and 77 percent of the total investments in the TMT sector.

There were 1,340 investment deals in the technology sub-sector in the first six months, with total investment value reaching $16.6 billion. Notably, the semiconductor sector continued to attract an influx of investments, PwC said.

With the authorities' vigorous support for frontier fields such as artificial intelligence, quantum information and integrated circuits, and an accelerated push to bolster the construction of 5G networks, industrial internet and big data centers, PE and VC investments in China's TMT industry will show vitality again, said Walter Zhang, assurance markets leader for PwC North China.

In addition, the domestic capital market will continue to boom and become more favored by Chinese enterprises, driven by the fine-tuning of the registration-based IPO system, Zhang added.