(Yicai Global) July 19 -- China's venture capital firms were managing over CNY1 trillion (USD146.5 billion) as of the end of May, giving the country the world's largest VC sector ahead of the United States.

China had 7,055 registered VC funds as of the same time, China News reported, citing a white paper released yesterday in Qingdao by China's Asset Management Association, covering the global venture capital market. The United States had 816 funds registered with the Securities and Exchange Commission as of the end of September 2018, managing USD81 billion.

China has been continuously improving its VC environment over recent years and has identified innovation as the key to its development strategy, the white paper said, adding that it is paying more attention to entrepreneurship than ever before.

The nation made up nearly a quarter of the world's total VC funding over the past three years, said Wu Chao, the white paper's editor. It also has four of the world's five biggest unicorns and seven of the top 10, he added, saying the integration of capital and new technologies will further expand China's supply-side reform and transform its economic structure, a process that will give its VC sector unprecedented growth potential.

Its venture capital market is growing faster than any other nation thanks to a rapid upgrading of its business environment, according to the paper, which said that VC funds are increasingly flowing into the Asia-Pacific region and Europe as the US's share of the sector declines year by year.

There were about 110 million venture capitalists worldwide as of the end of 2018, with companies making up 34.7 million. Some 21.5 million players joined the market last year, including 6.7 million new firms, or 18,300 new companies a day.

China's innovation is making it an ever-better business environment and improving market vitality, and a recent large number of entrepreneurial achievements that have kick-started its VC market, the white paper added.

Editor: James Boynton