(Yicai) May 19 -- Lingang Special Area, a key testing ground for economic and trade policies within the Shanghai Free Trade Zone, will spend around CNY200 million (USD27.7 million) per year to support early-stage technology startups.

Lingang also plans to offer various subsidies, such as housing and rental allowances, to attract talents to start businesses or work in the area, its management committee announced on May 16.

Eight tech startups, including photoresist resin maker Qicaiwei Shanghai Electronic Materials, were part of the first batch to receive support from the new initiative yesterday. Each got up to CNY5 million (USD693,530).

The funds will help Qicaiwei alleviate cash flow pressure from its long-cycled research and development work, Deputy General Manager Yu Rong told Yicai.

The goal of the new policy is to build Lingang into an "entrepreneurial city and a home for innovators," said Yang Zhengwei, executive deputy director of the committee. The local government aims to create no less than 150,000 jobs for young people over the next three years, attracting more than 50,000 sci-tech talents, Yang added.

The basic logic of the initiative is to help startups navigate the most challenging "zero to one" stage of entrepreneurship, using government grants before venture capital for initial support, noted Lu Yu, director of the committee's development and reform department.

After companies secure venture capital investments, the government's investment can be converted into equity, with a maximum shareholding ratio of no more than 10 percent, Lu said. However, it can also be withdrawn in the form of loans based on banks' benchmark interest rates, subject to the firms' preferences, Lu added.

In addition, Lingang will establish a new angel fund worth CNY500 million (USD69.4 million) for seed- and early-stage tech startups in the area, Yang pointed out. It will also collaborate with banks, insurers, and guarantee institutions to form a dedicated financial resources pool of over CNY5 billion (USD693.5 million) for local sci-tech firms.

Lingang will give young talents a settlement subsidy of up to CNY100,000 (USD13,870), an entrepreneurship subsidy of up to CNY300,000, and a research subsidy of up to CNY500,000, said Zhao Yihuai, special deputy director of the committee. Top talents can also get a local home purchase grant of up to CNY5 million, Zhao pointed out.

Various other living, employment, and entrepreneurship subsidies will be provided to young talents in their initial settlement stage in Lingang, Zhao pointed out.

Editors: Tang Shihua, Martin Kadiev