Shanghai Venture Capital Senior Executive Yuan Zhide said lifting the ban on initial public offerings is necessary if China's embattled venture capital industry is to be revived. According to Yuan, removing the ban on public listings will give the capital mainland companies need to increase their value and enable them to compete in the worldwide market. The Chinese central government had placed a ban on share listings for the past 13 months.

Speaking at a Venture Capital Guiding Fund of Shanghai forum, Yuan said efforts to grow young technology companies were constrained by the IPO ban. He said,  "The one year suspension of IPOs caused some limited partners [of the funds we invested in] to quit. The government has to let market forces play a major role in attracting funds and professional managers to the venture capital sector." Domestic venture capital investors in the private sector were especially hesitant to pour their money because of the uncertainty of the situation. This limited the capital available to promising startups, he added.

According to the SCMP report, the Shanghai guidance fund was one of the first fund of funds backed by the government to encourage innovations in technology. It has so far invested in 40 venture capital funds.

Investors have now labeled the year as a nuclear winter for the venture capital industry. Yuan said bold measures were needed to bring back the faith of the market players and help venture capital funds get back on its feet. He said, "Pension and insurance funds should be encouraged to allocate more capital to venture capital funds to reinforce the country's drive to upgrade its industrial mix."

In October last year, the China Securities Regulatory Commission announced a temporary stop to IPOs. The regulator has not yet given a schedule to resume public listings. As a result of the ban, venture capital funds have experienced difficulties in exiting and taking profits from their portfolio companies.