The finance bureau of Qingdao has budgeted 20 million yuan ($3.26 million) as a fund to attract angel investments. The city's finance bureau plans to establish two angel portfolio funds this year, hoping to attract total investment of 200 million yuan. In five years, the city aims to raise a total angel investment of more than 1 billion yuan, mobilizing over 10 billion yuan of venture capital, said Qingdaonews.com.

In an attempt to build up a financial system for technology companies in Qingdao, the finance bureau will use its funds to guide social capital to help tech companies grow. The tech companies should be in their early stage of development -- meaning less than 36 months of operations -- with innovative business models and great potential for success.

The finance bureaus of Qingdao and the Qingdao municipal science and technology commission have jointly formulated interim measures to manage the fund. The measures will be put into action on Sept 12 this year. A total of 31 rules specify the fund's source, usage and regulation to ensure the money is used in an appropriate and effective way.

Edited by Michael Thai, Li Xiaoliang and Zhao Jingchen