China will unveil a series of new measures aimed at promoting the development of the country's venture capital industry, recognizing its vital role in driving technological innovation, industrial upgrading and high-quality economic growth, the State Council, the country's Cabinet, said on Wednesday.

A reform package will be rolled out aimed at addressing the pain points across the VC investment life cycle — from fundraising and financing to post-investment management and capital exit, according to the State Council executive meeting chaired by Premier Li Qiang.

The decision came after China's VC market, as shown by data from the First New Voice, a Beijing-based research institute, experienced a sharp decline in the first half of the year.

The total investment amount across the entire VC market dropped by around 30 percent year-over-year, while the number of investment deals and the total capital invested also fell by nearly 40 percent, according to the institute.

Moreover, according to RimeData, a data service provider dedicated to the VC market, 2,063 new private equity and VC funds were launched in the first six months of the year, a 47.5 percent decrease compared to the same period last year. The total registered capital raised by these new funds was 664.9 billion yuan ($93.87 billion), a 28.3 percent year-over-year decline.

The meeting stressed that dedicated efforts will be made to support the domestic and overseas public listing of venture-backed technology enterprises, and develop robust secondary markets for equity transfers and mergers and acquisitions.

Ever since the new filing regulations for overseas listing took effect on March 31 last year, the China Securities Regulatory Commission has received such filings from 158 Chinese mainland companies as of mid-June, among which 85 floated in the Hong Kong bourse and 73 went public in the United States.

Steps to promote the pilot implementation of in-kind distribution of stock shares have been adopted at the meeting, alongside incentivizing private capital to establish market-oriented merger funds and secondary VC funds, all aimed at fostering a positive cycle within the VC ecosystem.

Policymakers will also work to transform state-owned capital into patient capital investment force, that is willing to forgo short-term gains in favor of sustainable growth and value creation over the long run, according to the meeting.

The Cabinet meeting also called for efforts to improve the policies and mechanisms around state capital deployment, performance evaluation, tolerance for mistakes and exit procedures.