Win-win outcome

The marriage of the rural economy and venture capital could create a win-win outcome, says Chen Jianhua, an expert on rural collective economies who offers consulting services for cooperative stock companies in Shenzhen.

"As the mainland's property sector goes through a tough period amid the economic slowdown and government restrictions, urban villages that have been relying on property leasing for years now have to seek fresh avenues to maintain and expand their fortunes. Venture capital investment is a new way for them to transform and achieve high-quality development," he says.

"Meanwhile, the influx of capital from urban villages is a boon for venture capital, injecting fresh blood into the industry and promoting technological innovation."

Shenzhen started rural urbanization in its special economic zones in 1992, with collective economic organizations being turned into enterprises known as cooperative stock companies. The companies are established on the basis of collective assets owned by urban villages, with the villagers themselves as shareholders.

According to the 2021 statistics of Shenzhen's State-owned Assets Supervision and Management Commission, the city was home to about 1,000 such companies, with nearly 250 billion yuan in total assets.