China’s government is placing a big bet on its ability to innovate in the technology sector, with the creation of a state-backed venture capital fund worth $6.5 billion to invest in local startups.

The VC fund was announced by China’s State Council yesterday on its official website, according to Reuters. “The establishment of the state venture capital investment guidance fund, with the focus to support fledging startups in emerging industries, is a significant step for the combination of technology and the market, innovations and manufacturing,” the report said.

It’s not clear when the VC fund will be launched, but the official statement says it will cover technology startups in innovative areas like biotechnology and green energy, among other fields. The State Council said in its statement that it’s looking to foster development and innovation in transportation, communications, research and design, environmental protection, and the promotion of cultural and artistic exports.

“We must improve the high-tech, high-value-added services,” the statement added.

According to the Financial Times, China’s government-sponsored VC fund aligns nicely with its financial reforms, as it will increase investment in the private sector and reduce its dependency on fixed asset investments in infrastructure and property.

China’s tech sector can certainly do with the boost. Since 2011, Chinese venture capital firms have struggled to raise much cash since the government put a moratorium on IPOs that made it difficult for companies to exit. However, that freeze was lifted early last year, and since then venture capital investment has dramatically increased, says Reuters.

Research outfit Zero21PO Capital says 83 new venture capital funds were established in China in the first half of 2014, and estimates there’s around $6.76 billion worth of local VC funds swimming around. It estimates that more than $5.3 billion of that cash has already been ploughed into local startups, with the majority going into companies involved in broader technology and science rather than consumer-oriented products and services.

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