The Chinese government on Tuesday announced measures to stimulate venture capital (VC) in an effort to sustain the ongoing entrepreneurial wave.

To increase investment in cash-starved startups, China will nurture more VC investors, strengthen policy support, diversify corporate financing channels and allow in more foreign capital, according to a guideline released by the State Council.

Industrial leaders, business incubators, wealth management companies and other institutional investors will be encouraged to make investment, as well as individuals, such as angel investors, said the guideline.

State-owned companies will be allowed to set up VC funds or invest in new firms.

Venture loans will also be promoted in an orderly manner.

The official policy support will focus on taxation and coordination between VC investment and government projects.

China will attract foreign VC by granting easier access and simplifying procedures. Domestic companies will be encouraged to invest in foreign startups.

In addition, the government will enhance supervision, create a withdrawal mechanism and help set up an industrial association for venture investors.

Robust VC will help generate new growth impetus and stabilize the economy,the guideline said.

Confronted with a prolonged economic slowdown, policymakers are promoting mass entrepreneurship and innovation to sustain growth, rolling out preferential policies for people to establish their own businesses.

New business registrations jumped 28.9 percent in the first eight months of 2016.

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