Expensive In, Narrow Out: Why China VC Barely Pays Today
2026 looks like a good year for Chinese venture capital. IPOs are returning, and the most visible AI and chip companies have produced eye-catching paper gains. I have invested in China’s private markets for more than a decade, but the question I keep coming back to is different: how much of that paper value will reach the people who financed the funds? In the first half of 2026, seven companies accounted for 41% of the value of VC/PE holdings in newly listed Chinese companies, measured at their issue prices.1 That concentration matters. My view is that, at today’s entry prices, many smaller independent managers and individual LPs are unlikely to earn net returns that justify the risk and a decade of illiquidity. This is a judgment about a particular part of the market, not a claim that no Chinese VC fund can perform well. ...